Key Takeaways:
- Loom Network token rallied over 500% in a month.
- The 200% uptrend in trading volumes could push the coin further.
- Upbit exchange might have pushed the rally, as it allegedly holds over 50% of the supply.
YEREVAN (CoinChapter.com) — Loom Network’s native token of the same name has dropped 10% to $0.26 on Oct. 13, reaching. Notably, the correction followed an explosive 500% rally that started on Sep. 19.
Bullish LOOM Metrics
The LOOM trading volumes were still booming at over 200% in the previous 24 hours. If the bulls take over, the token could start another leg up.
The growing number of LOOM wallets also testifies to a possible bullish continuation. According to on-chain data provider Santiment, Loom holders reached 15,800 by Oct. 13.
Upbit Chips-In With $5.8M
On Oct 13, another on-chain data provider, LookOnChain, reported that a wallet, possibly belonging to crypto exchange Upbit, bought 21.4 million LOOM coins worth $5.8 million. “The wallet currently holds 653 million LOOM ($181 million), 50% of the total supply,” added LookOnChain.
Upbit is currently responsible for over 53% of the Loom token’s trading volume against the Korean Won, while Binance holds 22% of the LOOM/USDT volume.
As a result, nearly 90% of the LOOM supply is held by whale addresses. Moreover, a whale accumulation likely pushed the rally in the first place.
Uh-Oh! LOOM Token RSI is Troubling
The LOOM price action against KRW also conquered a key resistance in mid-September that hindered the token’s upside attempts since July 2021. However, the token’s relative strength index (RSI; purple wave on the chart below) crossed above 70.
Generally, an “overbought” RSI indicates a profitable market exit point. If traders decide to take profits, LOOM could correct to a previous resistance of $302 KRW, or 25% below the current value.
Moreover, as whales hold most of the supply, the coin is more susceptible to market manipulation. Thus, potential traders should keep track of whale behavior to hedge their holdings against whale dumps.
