Before correcting somewhat, Gnosis (GNO) soared 13% in just 24 hours. In fact, it recorded a rally that hints at whether the token can topple one of the market’s leading memecoins, BONK, by market cap.
Such a reversal would elevate Gnosis to 100th place among tokens by market capitalization. At the time of writing, Gnosis held a market capitalization of $303.88 million, compared to BONK’s $330.07 million.
And yet, although it is close enough to attempt a reversal, Gnosis could nevertheless gradually consolidate and not yet ascend it.
Structural warnings surface for Gnosis
At the time of writing, indicator-based analysis suggested that Gnosis has entered overvalued territory and may struggle to sustain its rally in the near term.
The first signal came from the price pushing into the upper Bollinger Band (BB). The indicator assesses valuation based on price position, because while a move above the upper red band indicates overvaluation, a drop below the lower band signals undervaluation.
The price generally pulls back after reaching the upper band, often falling back towards the middle band, which was at $112.91 in this case. If this level holds as support, the rebound could resume from there.
However, stronger selling pressure could push the price down to the lower green band at $103.41 before any further push to a new high. However, in recent times, capital has continued to decline, a sign that sellers remain active.
The Money Flow Index (MFI), which tracks capital movements into and out of an asset, also fell sharply for Gnosis, indicating greater capital outflows than inflows.
Spot netflow guides the GNO rally
Data from CoinGlass revealed that spot activity has dictated the direction of Gnosis, with derivatives playing little role in this movement.
The spot read hinted at significant profit-taking as Gnosis surged over the past day, with $1.19 million sold as part of the rally. Buyers failed to keep pace, tipping the scales toward a net sellers’ market and leaving a net flow near $246,000.
This reads like classic profit-taking, although increasing net flow from here would leave Gnosis with little chance of a rebound.
A more constructive reading was evident on the seven-day net flow, however, where sellers held just a $283,000 advantage, even though the price gained 17% over the same period. If this dynamic repeats, any decline would likely amount to a temporary pullback before growth resumes.
What does GNO need to return BONK?
Assuming BONK’s market capitalization remains at $330.07 million – which is unlikely in a moving market – a somewhat significant rise in Gnosis’s price would complete the reversal. As it stands, to close the aforementioned gap, GNO would need to climb to $125.48.
However, this move can only materialize once the price has stabilized in a support region or reversed beforehand.
Final summary
- Gnosis only needs a slight price increase to overtake BONK and claim the 100th spot in terms of market value.
- Momentum indicators indicated that any upward movement could stall or pull back before a reversal actually occurs.
