Why The Graph Token Price Engulps a ZERO-Raises Beyond $0.1-What Triggered a 40% rally?

Key Takeaways:

• The Graph token underwent a giant price action during the past weekend and surged above $0.1 for the first time since September 2022
• As the bulls seem to have regained control, the price is believed to maintain a notable upswing for the rest of the year, reclaiming the lost positions 
• With a magnificent upswing, the GRT price closed the previous day’s trade at $0.132 with a market capitalization of $996.1 million and a circulating supply of 8.7 billion

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The Graph token, a data indexing protocol for networks like Ethereum, has displayed an iconic price movement in the past couple of days. The price surged by nearly 40% from levels around $0.982 to as high as $0.1324 and continues to display acute bullish momentum. The price action was in the times when the crypto markets were consolidating heavily as the star crypto Bitcoin was struggling to hold above $23,000. Meanwhile, a drop below these levels has compelled the altcoins including the Graph token to experience a slight pullback. 

The sharp increase in the prices may have resulted in the recent jump in the circulating supply resulting in an unlock of the locked GRT tokens. Framework Ventures, a venture capital firm, withdrew 99 million GRT tokens from the Graph’s staking contract and token lockup contract. With this the circulating supply of the GRT tokens raised from 7.4 billion to as high as 8.89 billion within 24 hours. 

The withdrawal is said to be the highest withdrawal from the Graph’s staking contract and the no of GRT tokens transferred is among the 10 largest GRT transactions in the past 12 months. This may have induced bullish sentiments that amplified the volatility resulting in a massive upswing in recent times. 

The Graph Token Technical Overview

Source: Tradingview

• The GRT price is undergoing parabolic recovery to reach levels close to the neckline at $0.15
• The recent upswing appears to be the result due to a sudden rise in the buying volume, but the fresh bearish action is hindering the progress of the rally
• The price is believed to maintain a consolidated ascending trend until it tests the neckline and is believed to hover along these levels for sometime
• The price may not be largely impacted despite the bearish interference as the MACD continues to remain within the bullish regions 
• Therefore, after withstanding significant bearish action, the price is believed to regain the levels beyond $0.15 with the next bullish action

Additional read: Top Crypto Projects In 2023

The Graph Token On-Chain Analysis

The Graph Token Social Dominance

Source: Santiment

The social dominance of the token is the number of messages or posts being circulated over the social media platform compared to that of the top 100 cryptos as per the market cap. A rise in the levels indicates the increased interest of the market participants compared to the other tokens, and a drop indicates the shift of focus away from the crypto. 

The social dominance of the Graph token has been swinging high for a long time, and hence the volatility of the price has also remained pretty high. Currently, a minor drop is seen, but the current price action may attract many strong hands onto the platform, which may spike the dominance levels in the coming days.

The Graph Token Supply on Exchanges vs Supply Held by Top Addresses

Source: Santiment

The supply on the exchanges indicates the number of tokens held by the wallets monitored by the exchanges. While the supply on the top addresses can be considered the holdings of the whales. The combined exchanges and the addresses are being considered here which displays the adoption and the attention of the market participants over the token. 

A significant rise is seen in both metrics which indicates the top addresses accumulating a significant amount of tokens. Meanwhile, a rise in the supply of exchanges indicates the traders transferring their tokens onto the exchanges with the intention to either sell or swap the tokens. With this, it can be assumed that the retail traders may have liquidated their holdings while whales are accumulating. 

The Graph Token MVRV/NVT Ratio

Source: Santiment

The MVRV ratio is the comparison of the market value and the realized value driven by dividing the market cap by the realized capitalization to get the fair value of the token. If the current value is higher than the fair value, then the token is overvalued and undervalued in the other case. While the NVT ratio compared the transaction volume of crypto to its market capitalization. 

The MVRV ratio in the present case has been surging beyond the average levels indicating that the price is overvalued and hence a minor pullback may be imminent. On the other hand, the drop in the NVT ratio indicates that the transaction volume of the crypto is swelling faster than that of the market cap. 

Concluding Thought!

The Graph token has gained significant attention in recent times with a growing volume and whale holdings. The bullish momentum is believed to maintain a notable rise in the coming days as social dominance is on the rise. Moreover, the increase in the balance in the top addresses may induce bullish sentiments within the market participants.