Bancor: Why despite recent withdrawals, BNT could be ready for a rally

Bancor’s native cryptocurrency, BNT, saw sideways price action as it entered a consolidation zone. This can potentially indicate building momentum for a breakout or a breakdown, but the aspect of the timing is anyone’s guess.

BNT was trading at $2.16 after extending its 5.57% decline over the past 24 hours at the time of this article’s publication. Its price action has been hovering in the same price zone for the past five days and such consolidation often tends to lead to a breakout.

However, its current trajectory suggests that a breakdown could be likely, but what if it is a temporary sell-off before a rally? It is therefore important to assess where the consolidation is occurring to understand the probable direction of the breakout.

BNT’s latest price action dipped below its 50-day moving average. It briefly topped it towards the end of March, while the falling price level also pushed further below its RSI neutral zone. Its MFI indicator currently suggests that the price has already entered the accumulation zone.

BNT’s on-chain metrics

Lower prices and sideways BNT activity reflect increased volumes of FX outflows which slightly outpace FX inflows. However, both have recorded a significant increase in recent days.

Source: Glassnode

Meanwhile, Santiment’s on-chain volume has grown from around 38 million BNT between April 15-16 to around 16 million at the time of writing.

Its MVRV ratio fell to a weekly low of -10.76% on April 14 and improved slightly to -9.34%. The ratio reveals that many BNT holders are currently strapped for cash and may have to hold out until they break even. This may translate into a drop in selling pressure to current levels.

Source: Santiment

In summary, BNT is currently in a healthy accumulation zone according to its on-chain metrics which align with the IMF. The decentralized platform has just announced Bancor 3 governance approval and a community call for its beta version ahead of its planned mainnet launch. These developments may support a shift in sentiment in favor of the bulls.