Since last June Quant (QNT) has achieved a tour de force making many other cryptocurrencies in the industry envious. Indeed, in the space of 4 months this crypto has taken more than 450%.
Nevertheless, all good things must come to an end and it seems that this is the case for Quant whose chart of the last few days shows an impressive dump causing the value of this asset to fall. There are mainly 3 reasons which explain such a situation, here they are!
The number of active addresses plummeting
According to technical analysis, it seems that investors have reached the maximum point and now the majority of individuals tend for sale in order to receive the gains on this capital gain of the cryptocurrency Quant (QNT) in the last 4 months.
One of the reasons showing such a result is the number of active addresses which has been in freefall for the past few days. Indeed, when the price rose last June, it coincided with a substantial increase in investors. This logically leads to more demand and thus drives up the price while having more investors holding on to their tokens.
In particular, there is an index that evaluates the number of unique addresses on the network for both sending and receiving. However, the ATH (All Time High) was 10,949 addresses on October 17 last against 5850 4 months ago after Saintly.
On the other hand, for the past three days, this index has again fallen sharply with 6,800 addresses on October 19. At the same time, the price of QNT fell 25.5% in those few days to fall at $173 at the time of writing this article.
Cryptocurrency investing is offered by eToro (Europe) Ltd as a PSAN, registered with the AMF. Cryptocurrencies are very volatile. No consumer protection.
A necessary correction
When the price of a cryptocurrency rises too sharply, sooner or later the market will correct. This generally occurs following a more or less significant dump by some of the investors who wish to sell to recover their gains. There may therefore be a wind of panic leading to a massive sale in some cases which can further impact the price.
In Quant’s case, the current dump sent the price down more than $50, but it’s still a relatively decent correction compared to the overall chart across all months. Indeed, when you consult its RSI (Relative Strength Index) it had exceeded 70 on October 17, signaling that there was an overbought of QNT tokens.
This doesn’t necessarily mean a bearish comeback, but in most cases it shows that the price has risen way too fast and that a correction is more and more likely to occur before a possible next rise. Therefore, after the dump the RSI corrected to 65 with the value of the token decreasing significantly around $185 which was strong support in August 2021.
Nevertheless, this support did not hold and we now find ourselves around $173 with the next support around $137-$150 indicating that the fall could continue for a little longer.
The decrease in QNT whales
Another unmistakable clue is the decrease in QNT whales. Indeed, during the Quant boom period, it also strongly coincided with more addresses owning at least 100 to 1000 Quant tokens. These investors are called whales, because they have substantial resources and have the power to influence the market on a more or less large scale, as is the case with Bitcoin.
On the other hand, from October 16 the number of whales began to decrease meaning that they began to sell their QNT tokens and therefore directly impacting the price of the token little by little. Indeed, if there are substantial sales, this leads a drop in value and more incentive for small investors to sell.
The whales therefore largely sold around the peak of QNT’s value which produced the dump and the current fall in the asset. It is these three reasons which explain why Quant lost more than $50 of its value within a matter of days after experiencing 4 upward months with gains of over 450%.
A few weeks ago, we explained to you that Quant could reach $150 during this year. It is now done despite the current dump. find this analysis here in order to learn more.