A brand new breakout cryptocurrency all-star following within the footsteps of Chainlink has been on an insane over 380% rally over the past three weeks alone. But what goes up, should come down, and the over 30% correction in Band protocol could end in a blow of high. Here’s why.
Decentralized Oracle Hype Sends Leading Crypto Altcoins Soaring
The cryptocurrency market is a speculative asset class the place valuations are pushed by hype. Supply and demand come into play, however with crypto, irrational exuberance or excessive concern far outweigh regular market dynamics.
When belongings are trending, they usually carry out rather a lot higher than most buyers would count on. Take Bitcoin for instance. The asset has grown from nearly nugatory from the place it’s right now.
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Even those who believed in it early on doubtless by no means anticipated the asset to go parabolic and rise to as excessive because it did in the course of the peak crypto bubble.
The similar just lately occurred with Chainlink, when the asset broke previous its all-time excessive and entered value discovery mode. But as indicators of a blow-off high in Chainlink shaped, income flowed out of the decentralized oracle resolution and into one other.
BANDUSDT Daily 30% Correction | Source: TradingView
The FOMO from one altcoin to a different has fueled an over 380% rise in simply three weeks in Band protocol, however an over 30% correction might be an indication the rally is over.
Blow-Off Top On Band Protocol Possible If Fractal Confirms Several Indicator Sell Signals
Let’s be actual – few crypto buyers are really in it for the tech. However, buyers in Chainlink pouring income into Band protocol might be an indication they’re really enamored with the decentralized oracle know-how.
Chainlink just lately was acknowledged by the World Economic Forum for its tech, and the brand new competitor has been giving Chainlink a run for its fiat influx.
BANDUSDT grew by over 380% for the reason that begin of July, however a 30% correction has begun over the past 48 hours. While a 30% correction is nothing in comparison with the 380% constructive return, in parabolic belongings as soon as that parabola breaks, they usually fall over 80% or extra.
Bitcoin crashed by 84% after its parabolic run ended with a blow-off high. Chainlink just lately had a blow-off high, and now it might be Band protocol’s flip.
BANDUSDT 3D TD Sequential Countdown | Source: TradingView
On 3-day timeframes, BANDUSDT is on a 12 depend and about to set off a 13 promote setup on the TD Sequential Countdown. The asset can be buying and selling inside a big ascending wedge – a bearish chart sample.
Zooming in additional on every day timeframes, a fractal could also be forming that beforehand resulted in an over 70% decline within the asset on the USDT buying and selling pair.
BANDUSDT Daily 70% Retracement Fractal | Source: TradingView
Technical evaluation indicators give extra credence to the idea of a big pullback being potential. A big bearish divergence has shaped on the Stochastic oscillator.
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Both Stoch and the Relative Strength Index have reached essentially the most overbought ranges within the asset’s value historical past. The MACD, or shifting common convergence divergence indicator, can be displaying the most important divergence but. As the 2 shifting averages diverge, it indicators an asset is overbought. The bigger the divergence, the extra overbought the asset.
BANDUSDT Daily Stochastic, Relative Strength Index, & MACD | Source: TradingView
If the MACD shifting averages flip downward and crossover, a bearish breakdown is feasible.
Several indicators at the moment are pointing to prolonged draw back in Band protocol. But very like Chainlink has completed, any promote indicators have been shaken off, and brief positions had been used to squeeze costs increased and better. Will the identical occur for Band?