The Band Protocol price has collapsed to its all-time low as concerns about the decentralized finance (DeFi) industry remains. $BAND is trading at $1.29, which is about 95% below its all-time high. According to CoinGecko, the network has a total market cap of over $53 million. At its peak, it was one of the biggest cryptocurrencies in the world with a market value of over $600 million.
The fall from grace
Band Protocol is an important blockchain project. It is a smart oracle network that helps developers integrate off-chain data to the on-chain ecosystem. For example, a developer building a decentralized stock trading application can use the network for accurate and verifiable price feeds.
Oracle networks have many uses. For example, a developer building a sports betting app can use it to integrate real data to the network. Similarly, a person building a weather app can take off-chain data to their platforms.
There are three main reasons why Band Protocol has had a spectacular fall from grace in the past few months. First, the Decentralized Finance (DeFi) industry has collapsed. At its peak, the industry had over $250 billion in total value locked (TVL). Today, the figure stands at less than $75 billion.
Band Protocol has seen its total value secured (TVS) fall from over $6.3 billion to the current $468 million. Some of the top DeFi projects that use the protocol are Loopring, KyberSwap, Homora, and Balanced among others.
Most of the recent crash are attributed to the recent crash of Terra and its ecosystem. At its peak, applications in the Terra ecosystem had a total value locked of over $30 billion. They include assets like Anchor Protocol, Lido, and Astroport.
Oracle competition rising
Second, the Band Protocol has fallen from grace because of the rising competition in the smart oracle industry. Some of the top competitors are platforms like Chainlink, Maker, WinkLink, Pyth, and Dia. All these projects are competing in an industry that is facing significant competitive challenges.
Third, BAND price has dropped because of the ongoing crash of cryptocurrencies and the stock market. The Dow Jones, Nasdaq 100, and DAX index have crashed by over 20% this year. Stocks like Upstart and Waitr have fallen by over 70%.
This decline is mostly because of the extremely hawkish Federal Reserve. The Fed has hiked interest rates by 150 basis points and hinted that it will hike more.
Band Protocol price prediction
The daily chart shows that the BAND price has been in a strong bearish trend in the past few months. As a result, the coin has dropped below the 50-day and 25-day moving averages.
A closer look shows that it has formed a strong support at $1.1944, where it has struggled to move below since May this year.
The price is also below the important resistance at $2.9841, which was the lowest point in March. Therefore, more sell-off will be confirmed if the price moves below the support at $1.1944. If this happens, the next key support level to watch will be at $1, which is about 25% below the current level.