While an ongoing technical divergence between BOND's price and volumes suggests upside exhaustion.
A new and relatively unknown DeFi token called BarnBridge (BOND) has rallied over 800% to reach $20 on July 26.
The BOND price surge comes more than a month after bottoming out at around $2.19. In comparison, top coins, Bitcoin (BTC) and Ether (ETH) have only rebounded by 18% and 54% in the same period, respectively.
Another pump and dump?
BarnBridge is a cross-chain risk management protocol that offers a suite of composable DeFi products for investors to hedge against interest rate fluctuations and price volatility.
Examples include SMART Yield — a product that enables investors to secure fixed rate yields from the debt pools of other projects such as Aave, Compound, Cream, or Yearn.finance — and SMART Exposure, which offers investors tools to rebalance portfolios.
BarnBridge's latest product, SMART Alpha, allows investors to hedge against price fluctuations and provides them leverage for bullish theses. Meanwhile, BOND serves as a governance token to the Ethereum-based DAO representing BarnBridge.
On the surface, the latest BOND price pump should reflect a booming interest in risk-trenching protocols, primarily when many projects in the DeFi sector have failed. But the token's gains appear largely speculative if one focuses on its trading volume concentration.
Notably, more than 50% of BOND volumes have originated at Binance in the past 24 hours, according to data tracked by CoinMarketCap. At the same time, the daily trading activity of the benchmark BOND/USD pair has been declining during the price pump, as shown below.
The price-volume divergence suggests that fewer investors have been behind the BOND price pump, increasing the chances of a sharp correction in the coming days or weeks.
Next BOND price targets
Drawing a Fibonacci retracement graph from BOND's swing high of $37.50 to its swing low of $2.18 churns out a sequence of potential support and resistance levels, as shown in the weekly chart below.
BOND has been retreating after testing $24 as its interim resistance, and now anticipates to undergo an extended correction toward $15.60, down 17.5% from July 26's price. A further breakdown risks crashing the price to $10.50, or a 45% decline.
Conversely, a rebound above $24 could have BOND test $30 as its next upside target. Another breakout move could shift the target to $37.50, up 95% from current price levels.
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