It’s been a rough year so far for holders of the rendering network’s native token, RNDR. Despite falling outside the top 100 cryptocurrencies starting 2023 at a modest price of $0.4, the ERC20 token has delivered an incredible 400% performance, surpassing the $2 mark for the first time after 10 months.
Big investors continue to pile into the bullish RNDR market. But how long will the triple-digit rally last before a correction begins? By analyzing the key on-chain metrics that drive a significant increase in the value of the token, we can make an objective prediction of the price trend in the coming days.
Despite 4x profit, holder RNDR is still not profitable
RNDR became the second best performing altcoin in the global cryptocurrency market this year. But despite the impressive performance of 400%, on-chain data shows that top holders in the ecosystem continue to bet on the token, expecting a much higher price.
Whale Transaction Volume and Societal Interest February 2023 | Source: Santiment.net
Investors are sure to see another positive performance from RNDR in February, according to Santiment. The activity of whales with daily trading volume above $100,000 has been steadily increasing since January 7. This token is also increased. The rise in the number of whale transactions and interest is a sign that the price of RNDR is about to explode.
Why Render Token soared?
In November, Render grew by 50% after the Apple App Store listed OctaneRender, a mobile app that allows GPU owners to participate in rendering networks, and popular payments company Revolut added the RNDR token to your platform. But this time around, on-chain metrics suggest that the current RNDR price rally is fueled by speculation and generally optimistic social sentiment.
In the speculative market, data provided by Coinglass shows that new demand has been steadily pouring into Render Network transactions since February 1.
RNDR Open Contract February 2023 | Source: Coinglass.com
Trading in speculative RNDR derivatives tracked on top exchanges including Binance, Bybit and CoinEX has grown by a staggering 500% since Feb. 2, according to Coinglass data. This bullish signal shows how RNDR is attracting new demand at a rate that is currently higher than its growth rate.
Open Interest (OI) is increasing predictions for an upcoming rally.
Is RNDR a good investment this month?
Strong speculative activity in the derivatives market and whale trading volume were the main drivers of the RNDR price increase over the past seven days. But the network value to transaction (NVT) ratio suggests the coin is far from overbought.
NVT compares an asset’s market capitalization to its daily trading volume – similar to how the price-to-earnings ratio is used in the stock market.
RNDR NVT Rates February 2023 | Source: Santiment
Compared with the peak value of 950.3 set on January 2, RNDR’s NVT ratio has remained below 100 since mid-January. Combined with the open community with increased transaction volume and increased contracts, Render Network’s rise is likely to continue until this year 2 Mid-year.
In contrast, forecast markets on top exchanges are flashing slightly bearish signals as bears appear to outnumber bulls.
Rendering network and long/short ratios in February 2023 | Source: Coinglass
According to Coinglass, the long/short ratio remained below 1:1 for five consecutive days as of Feb. 7, favoring bears. This calls for caution, as the long/short ratio suggests that many investors are shorting RNDR in preparation for a sharp correction to come.
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