Tellor (TRB) is attracting investor attention this week after racing to a new 2023 high of $35 on the list of top-performing cryptocurrencies. On-chain analysis reveals the underlying factors driving the ongoing altcoin price rally. Crypto analyst Ibrahim Ajibade explores how long this could potentially last.
Tellor (TRB) is a decentralized oracle protocol that provides a blockchain infrastructure to integrate valuable off-chain data into on-chain smart contracts. This month, TRB’s price increased by 134% to reach $35 on Thursday, September 14th. As reported by coinciforum.com, the global payment platform SWIFT Network announced the completion of dress rehearsals to leverage Chainlink‘s (LINK) oracle infrastructure to bring Tokenize TradFi and Real-World Assets to the blockchain. This announcement further boosted the Tellor (TRB) price.
The initial clues derived from on-chain data trends indicate that short-term speculators are driving the TRB price rally. However, can they hold on long enough to compete with Chainlink and other major players in the decentralized oracle sector?
Short-term traders are currently driving the TRB rally. Data from IntoTheBlock shows that short-term trader wallets increased their balances by over 2,000% within the past month. As seen in The Graph below, short-term investors held only 91,130 TRB tokens as of August 13th. However, as of September 13th, this figure had increased by 2,096% to reach 1.9 million TRB tokens. During this period, the altcoin price recorded a 135% increase. Additionally, “Cruisers” and “Long-Term Holders” gradually sold 137,000 and 1.64 million TRB tokens, respectively.
On-chain data also reveals that the altcoin price continues to rise as a result of these factors. In the crypto space, wallets that hold tokens for 1 month or less are referred to as “Short-term Traders,” while those holding for 1 to 12 months are called “Cruisers,” and those holding for 1 year or more are known as “Long-Term Holders.” The graph above clearly shows that the dominance of short-term traders in the Tellor ownership structure increased from 3.65% on August 14th to 75% as of September 14th.
Meanwhile, long-term investors and partners of the Tellor protocol are closing their positions. This indicates that the recent price increase is driven by speculative trading rather than organic growth in the fundamental value of the Tellor network. This also suggests that there may be higher token turnover in the coming days. Without significant growth in network demand or continued support from long-term investors who believe in the fundamentals of the altcoin project, sustaining the upward momentum of the price may be challenging for TRB.
TRB investors will have to wait for further gains. Despite the triple-digit price increase this month, Tellor traders are still hungry for more. On-chain data shows that TRB exchange reserves are rapidly decreasing as investors withdraw their tokens from exchanges this week. As seen in the graph below, the altcoin price rally gained momentum when investors started withdrawing their tokens from exchanges around August 25th. Since then, TRB supply on exchanges has decreased from 2.3 million tokens to 1.5 million tokens.
From an on-chain perspective, it is possible for TRB bulls to consolidate around the $20 support level in case of a correction. This requires looking at the buying price distribution of existing Tellor holders. In this regard, the Price Around In The Money/Out of the Money (IOMAP) data also confirms this stance.
This data clearly shows that the $20 level is the largest cluster where TRB holders entered the market. As shown below, 553 addresses have bought 1.16 million coins at an average price of $20. If exchange reserves remain low, it is possible that a supply squeeze could trigger a rebound. However, if speculative traders decide to take early profits, the situation could change, and the altcoin price could immediately retreat towards $14.
On the other hand, if TRB bulls gain significant support in network traction, it is possible for the rally to reach the $50 range. However, the 974 addresses that hold 78,500 TRB at an average price of $42 are likely to present the first resistance. If the bulls break through this selling wall, the altcoin price rally could aim to reclaim $50.
In summary, the Tellor (TRB) altcoin has seen a significant rally driven by short-term traders and speculators. The decreasing supply on exchanges indicates that investors are holding onto their tokens, which could potentially lead to further gains in the altcoin price. However, sustaining the upward momentum will depend on significant growth in network demand and continued support from long-term investors.
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