Bancor Network (BNT) is the native token on Ethereum from the Automatic Market Maker (AMM) of the same name.
Its market price has been practically lateralizing since late June, because for more than three months it has been fluctuating in a range between $0.4 and $0.5.
However, this relatively long period of lateralization and stability may soon be interrupted.
Summary
Santiment’s data on Bancor Network (BNT)
This is revealed by Santiment, according to whom the fact that the price of BNT recently rose above $0.45 for the first time in weeks could be a sign of the arrival of enormous volatility, which could explode at any time.
🏦 #Bancor's price has been spiking today, jumping above $0.4556 for the first time in two weeks. As an #altcoin with one of the highest level of coins on exchanges within the top 200, there can be massive volatility breaking out for $BNT at any time. https://t.co/Z7tGEALmrn pic.twitter.com/1cuON16ev8
— Santiment (@santimentfeed) October 11, 2022
Indeed, BNT has one of the highest percentages of tokens deposited on exchanges among the 300 highest-capitalization cryptocurrencies.
So with many tokens on exchanges there could be large and rapid downward movements. And indeed in the days following Santiment’s revelation there has already been an interesting movement in that direction.
Yesterday the price of BNT fell below $0.4, albeit very slightly, whereas when Santiment warned of possible volatility it was just below $0.45. That is a -11% done in just under two and a half days, although yesterday’s drop was probably only due to a general decline in the financial markets.
Whether that was the cause would seem to be confirmed by the fact that as soon as the markets recovered yesterday so did the price of BNT, which returned to about $0.43.
Yesterday’s was thus not the moment that triggered the enormous volatility suggested by Santiment, but such significant movements do indeed seem to indicate that Santiment’s hypothesis is at least plausible.
To be fair, yesterday’s trading volumes of BNT were not high at all. Several other tokens with similar market capitalization also traded at much higher volumes, and perhaps this is what prevented BNT’s price from becoming very volatile yesterday.
Therefore, the condition suggested by Santiment as a possible cause of volatility on BNT is not sufficient to cause it. It is probably necessary that two different situations must occur simultaneously, namely, high trading volume and sudden price movement. As is easy to guess, this is an occurrence that is far from obvious and predictable. In fact, Santiment itself by no means says that sooner or later volatility on BNT will definitely come.
Expectations on the BNT token
The point is that it seems that sooner or later the conditions for a significant increase in volatility may indeed be there, although if in theory there is also a real possibility that they may not occur.
Underlying Santiment’s reasoning is the detection of a sharp increase in BNT present on exchanges over the past three months, which have increased by as much as 46%.
This dynamic suggests that there are several BNT token holders who are preparing to sell should the price become attractive. In such an environment, any significant increase in the price could also trigger a strong wave of selling. Should all this lead to a surge in volumes, volatility would seem to be a rather likely consequence.
It is worth noting that BNT’s current market value is 96% below the all-time high touched in January 2018, and during last year’s big bullrun it barely managed to approach those levels.
The all-time high was $10.7, while last year’s high was $9.2. So if compared to the absolute highs the current price is 96% lower, compared to last year’s highs it is still 95% lower.
Moreover, the 2021 highs were touched in March, while in November, when the highs of BTC and The situation seems to indicate rather clearly that there is some possibility of strong declines being triggered were touched, the price of BNT did not exceed $4.7.
In such a situation, Santiment’s suggestion seems to be definitely plausible, although it is by no means a prediction. If we add to this the fact that the bear market of 2022 is most likely not yet over, this suggestion takes on even greater force.
