REN - What now after the blow off local top?

Assets covered: REN

Metrics used: Price, Coin supply on exchanges, MVRV30D

Summary:

After an impressive rally to $1.70 USD, REN finally had its blow off top and dipping below the important $1 psychological level.

Is it entirely over for REN? Let's take a quick look.

Notable events

• RenBridge V2 release - Adding Binance Smart Chain support
• REN joining Alameda
• For a recap of Feb events, follow their ecosystem update here.

Price

REN's recent run up saw more than +100% from the bottom, before topping out at $1.70 USD.

Since then, it's been trying to stay above the $1 psychological point and if it can make that as a strong support, the coming months (as long as broader bullmarket is intact) should see it attempt to make yet another new ATH.

REN's price action is still largely affected by how BTC and ETH behaves, a rising/ranging BTC or ETH provides the ideal environment for it to grow as participants get increasing risk-on. But once a significant dip happens on BTC or ETH, REN and generally alts in the space tend to crap their pants.

Overall, the space was due for a cool down, every other person was just leverage long and the $4.4 billion wipeout just shows how crazy things were.

Now that most people have blown their stash, they are likely to be risk-off now, perhaps we can see some consolidation happening.

Local tops are fine in a bullmarket, as eventually, they go on to make higher lows and higher highs. In REN's history, since bottoming out in late Dec 2020, it continued on to make new highs with increasing volume each time, which is a healthy thing.

The volume surrounding REN is healthy so far and shows increased demand from before. It'll be encouraging if we see further increase of volume than before in the next rally.

Coin Supply on Exchanges

REN's coin supply on exchanges saw consecutive huge spikes just before the rally topped out. This may suggest that certain parties were preparing for this move and others just piled on at the top.

Once things crashed, we also saw Coin supply on exchanges dipped lower, suggesting that some might have accumulated at the lows.

The continued downtrend for REN's coin supply on exchanges is a good one in general as it reduces sell pressure. But it's worth noting similar behaviours (parabolic price, consistent increase in supply on exchanges) in the future to identify a possible top.

MVRV30D

REN's MVRV30 have retraced to a healthier zone after overheating. Looking at the REN's history of MVRV30D, it seems that everytime it hits 61.9% or more, an impending sell off will shortly come.

Bottom buying zones remain in the range of -11% and below.

Top holders

The number #1 top holder of REN continues to be the RenVM contract, which is used for darknodes (100,000 REN per darknode). This is very healthy as the core component of the network is showing strong demand and functioning as intended.

Historical balance of the RenVM shows that 24M REN (2.42% of total REN supply) been added to it since the start of the year.

Besides the RenVM contract, there's a notable holder in #5 that seems to have accumulated REN from Binance in the past 36 days and recently gotten 20M REN from another address that's a long term holder of REN.

Could it be an OTC deal? OR perhaps a long term holder is switching wallets? Nonetheless, this large accumulative behavior suggests a possible long term play and is generally healthy as it sets a certain price floor.

Going forward

Overall, REN's price action is a healthy one. Network suggests strong hands are in place and committed to the success of REN. This is also evident from the recent addition of Alameda.

However, it's still subjected to how BTC or ETH behaves. As long as bulltrend is intact, this is just a local top, simmer down for consolidation and continuation of trend.