Don’t look now (especially if you’re a Chainlink fan), but BAND is getting awfully close to breaking its previous all time high.
Since Monday morning, the Band Protocol’s native token has been on a decidedly upward path, gaining +54.4% in the past 72 hours. At the time of writing, BAND is hovering around $1.66 on its way to retesting the all-time-high $1.96 recorded in early June.
Based on its timing, the catalyst for the rally appears to be the recently-announced roadmap for the Phase 1 of the upcoming BandChain mainnet, codenamed Guan Yu (Wikipedia tells me Guan Yu was a Chinese general often deified and dubbed ‘God of War’ by later emperors):
“Phase 1 […] will support the permissionless creation of customizable data oracle scripts that can query any open data source or API on Web 2.0.“, reads the announcement. “While Phase 1 is already live on the Devnet and being used to integrate with our partners to conduct internal testing and code audits, we are proud to announce the next steps to bring this to the BandChain mainnet.”
On top of the Phase 1 schedule release, the Band team has also shared several other price-moving news in the past few days for good measure, like the project’s collaboration with the Waves Protocol to support various DeFi and Web 3.0 Apps, or their strategic partnership with Satang, the oldest cryptocurrency exchange in Thailand.
In a word, BAND has been going parabolic since the week started – but can the rally continue into price discovery, or is a local correction already in the works?
Looking at BAND’s on-chain and social activity in the past 48, several warning indicators have indeed started flashing, although it still feels premature to call in a ‘top’.
Let’s start with my concerns:
Rising sell pressure
The amount of active BAND deposits (addresses used to move coins to exchanges) has spiked aggressively in the past 48 hours, now mirroring the levels recorded around the coin’s May 27th top:
As you can see above, extremely high levels of active deposits – especially during a rally – often tend to coincide with local tops and short-term corrections for BAND, as ‘weak hands’ begin to offload their bags to exchanges and start to take profit.
In line with the above, the amount of transactions involving BAND deposit addresses has also spiked to a 30-day high 101:
Finally, the actual amount of BAND moving to known exchange wallets has absolutely mushroomed in the past few days, peaking at over 940,000 BAND (~$1,560,000 at the time of writing):
In other words, BAND bulls are facing mounting sell pressure as the coin continues to rally, which might hinder its bid for price discovery.
Obviously, $1.5m worth of BAND is a huge amount of possible sell pressure. The question is – where is this pressure coming from? Is this a mass exodus of BAND holders across the network, or is this a few lone whales moving into position?
Guess what – you can find out exactly where the sell pressure is coming from with our new Top Transactions dashboards, which we’ve literally just yesterday added to Sanbase.
Nested under ‘Transaction Volume’, Top Transactions allow you to shift+ctrl any time frame on the chart, and get a long list of all the largest coin transactions for your selected time frame.
To track the 940k+ BAND moving to exchanges, I selected the last 3 days of data (consistent with the exchange inflow spike), and immediately discovered one MASSIVE transaction towering above all others:
A single transfer of 925,000 BAND to a labeled exchange address has been made yesterday at 03:00 UTC. Clearly, this one transaction is responsible for a lion’s share of the current sell pressure around BAND on centralized exchanges.
Clicking on the hash takes us to the transaction’s Etherscan details, where we find out that the coins were sent to a known Binance wallet:
Looking deeper into the sender address, it appears that they received BAND from 4 different addresses minutes before offloading it all to Binance:
It seems highly likely that all four addresses belong to the same person/entity, as they’ve all received much of their BAND precisely 203 days ago, with several accumulation steps in between. For example, here are all of the BAND-related transactions involving the largest address of the four:
Finally, we can take this investigation full circle by plugging in this address in our Historical Balance tool, to visualize their BAND holdings across all time. As you can see, this particular address acquired 125k BAND on three different occasions (last time in mid June) before offloading all of it to Binance on July 8th:
Talk about granular analysis, am I right!? You can get full access to our Top Transactions dashboard and all other on-chain metrics and indicators by subscribing to Sanbase Pro.
All in all, the above certainly poses some concerns for BAND’s short-term price action, although it’s good to know that most of the current sell intent originates from a single source, rather than it being a network-wide sentiment. Will the bulls be able to absorb a potential 940k sell wall in an effort to prolong the BAND rally? Watch this space.
Another possible yellow flag for BAND’s sustained uptrend is its 30-day MVRV ratio, which tracks the average profit or loss of the addresses that acquired BAND in the past 30 days (‘new money’). Their current MVRV ratio stands at 1.32, meaning that these holders are – on average – 32% in profit on their initial investment.
As a general rule of thumb, the higher the MVRV ratio the more likely holders start to exit their positions and take profit. Historical MVRV levels around local tops can tell us the average ROIs at which BAND’s short-term holders have been comfortable selling:
The above screenshot paints quite the picture – it tells us that, for most of BAND’s lifetime, short-term holders were content with selling at anywhere between 1.24 and 1.52 (24%-52% profit) – except for the first leg of BAND’s rally to ATH, where the hype was big enough and the price rose fast enough that ‘new money’ held – on average – until 250% profit before exiting their positions.
That 2.49 rally is a pretty amazing case study, by the way. Notice that interim dip in the 30d MVRV at 2.49, despite the price still pushing upwards? It was an early warning sign that short-term holders were already on their way out, which soon translated into a major correction for BAND.
Zooming in to just the last 3 months, we can see that BAND’s local price tops usually occurred somewhere between 24-31% ROI, which makes the current level of 32% increasingly worrying.
That said, we’ve seen BAND’s short-term holders hold for much longer on their way to ATH. And considering the market-wide conditions and DeFi-related craze, it’s not out of the question to think they might be content with sitting on their bags for a while longer than usual.
Despite the above, there’s still a lot of fundamental support for a sustained BAND rally. For one, the total amount of addresses interacting with BAND has reached 377 on Wednesday – its second highest network activity day ever:
Strong on-chain activity is often a precursor for a sustained rally, so keep an eye on BAND’s daily active addresses in days to come. We’ve seen several tops in BAND’s recent history (shown above) marked with a growing divergence between its price action (pushing up) and its on-chain activity (retreating back to pre-pump levels). A major decline in BAND’s network activity in the next few days, paired with growing sell pressure, could spell trouble for its price momentum. For now, at least, the activity remains unusually high.
What’s also important that BAND’s biggest whales are – for the most part – still not selling. According to Sandata, out of the top 100 largest BAND addresses, those not belonging to exchanges continue to sit on their bags, signaling investor confidence:
There’s been a small dip in collective balance of these addresses in the past 72 hours, which might well be traced back to the above address moving 925,000 BAND to Binance.
Overall, these non-exchange addresses hold about 96.4% of BAND’s entire circulating supply (Band’s multisig alone holds ~64%), giving their decisions a massive pull on the rest of the BAND market. Should we see a strong(er) dip in their collective holdings in the next few days (and especially if its paired with another strong spike in BAND’s exchange inflow), the rally may be nearing its end.
Also, a quick look at BAND’s social data – the amount of BAND mentions on crypto social media has been on a slight rise in the past few days, but nothing to write home about yet. More interestingly though, our crowd sentiment metrics suggest that the recent BAND-related mood is relatively bearish, which should bode well for its short-term price potential. If you’ll notice, many of BAND’s largest price tops – including its ATH – coincided with a major spike in bullish sentiment, as the crowd gets irrationally confident and whales begin to dump on the FOMO crowd.
While there’s no shortage of ‘moon’ calls on crypto social media at the moment, the data suggests BAND sentiment remains relatively tempered, which could provide the price with more room to grow before we experience another correction.
And finally, regardless of BAND’s short-term price action, the Band team is undoubtedly making great strides on improving their platform. Their development activity has been consistently high especially since the start of 2020, so it’s no surprise that the project appeared in several of our recent monthly roundups of top ERC-20 dapps by dev activity.
If you want to know more about what the Band protocol has been working on lately, check out what their team told us last week for our June development report.
This report was produced using Santiment’s growing suite of market and network analytics tools – Sanbase and Sandata – which help users analyze the crypto market and find data-driven investment opportunities.
Santiment provides clean and reliable on-chain, social media and development information on over 1000 crypto assets, and develops unique metrics, signals, strategies and reports on top of our custom datasets.
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