Banana (BANANA) has recently surged by 44% in price, aiming to break out of a descending wedge pattern. While this positive development signals potential gains, the behavior of investors may pose a challenge to the altcoin's progress.
Despite the price rally, many investors are hesitant to hold, potentially delaying the anticipated breakout.
Banana Encounters Selling Pressure
In the last couple of weeks, the number of Banana tokens on exchanges has increased by 300,000, equivalent to almost $5 million. This rise in selling activity represents approximately 9% of the total market cap, currently standing at $55 million. The heightened supply on exchanges is a consequence of the altcoin's struggle to maintain its upward momentum, prompting several investors to sell off and secure their profits.
This uptick in selling activity indicates a prevailing bearish sentiment surrounding Banana. The inability to sustain its recovery has triggered a wave of profit-taking, further impacting the price negatively.
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BANANA Supply On Exchanges. Source: Santiment
The overall trend for Banana has shown a notable uptick in active deposits in the last 24 hours, marking the highest level since November 2024. This surge implies a heightened movement of Banana tokens out of wallets, reflecting investor sentiment and their profit-taking actions.
Unlike previous sell-offs aimed at offsetting losses, this current wave of selling seems to be driven by investors securing profits. This shift in behavior could potentially lead to more selling in the near term, especially if the price stabilizes or continues to rise.
BANANA Active Deposits. Source: Santiment
BANANA Price Eyeing Breakthrough
Currently trading at $15.95 post a 44% increase in the last day, Banana finds itself within a descending wedge pattern that usually indicates bullish prospects. However, despite this setup, the altcoin has faced difficulty breaking out in the past day, leaving its future uncertain.
Should the current lackluster momentum and selling patterns persist, Banana might test the lower trend line of the wedge pattern. This scenario could drive the price down to $10.29, delaying any potential recovery and reinforcing the prevailing bearish sentiment.
BANANA Price Analysis. Source: TradingView
Conversely, with improved market conditions and a shift in investor sentiment, Banana could break out of the wedge pattern. A successful breach of the $17.57 resistance level would signify a reversal and could propel the price towards $23.24. Such a move would invalidate the current bearish outlook and signal the beginning of a more robust upward trend for Banana.