The price of Verasity (VRA) rose 40% to $0.0060 on Monday after a historic token burn event that destroyed 50% of the total circulating supply. On-chain analysis examines how the VRA price might react in the short to medium term.
Verasity attracted a lot of media attention at the time announced a community-driven decision to burn 10 billion units of its native VRA token. Could the resulting 40% price increase evolve into a sustained bull rally?
What is veracity and why is the VRA price increasing?
Verasity is an AI-powered blockchain protocol that provides advanced advertising services and open-access payment systems. On October 2, the team announced that it had burned 50% of its maximum stock following a public community consultation. This development has since driven the VRA token price to a 5-month high of $0.0060.
Verasity network growth quickly peaked in six months
Verastiy witnessed a noticeable spike in the number of new users after the token burning announcement. On-chain data from Santiment shows that 466 new VRA wallets were created on October 2.
Notably, the chart below shows that the last time the Verasity ecosystem experienced this level of network growth was in March 2023.
Network Growth evaluates the adoption rate of a blockchain protocol by collecting the daily number of new wallets. As expected, this increase in Verasity’s user acquisition and network demand has pushed the VRA price to a rapid 40% increase.
However, it remains to be seen whether many of these new entrants will stick with the products and services built on the Verasity network.
More bullish traders still want to get in on the action
Moreover, data collected from the order books of six recognized exchanges shows that bullish traders are still accumulating buy orders for VRA.
As shown below, the bull has placed active orders to purchase 507,000 units of VRA tokens. This is significantly higher than the 385,120 VRA auctioned at current prices.
The Exchange On-Chain Market Depth chart shows the current volume of active VRA spot orders placed on recognized cryptocurrency exchanges.
As seen above, market bids for Verasity are now outpacing supply by over 122.5 million VRA. This suggests that more bullish market participants are still trying to capitalize on the VRA price rally.
However, if the network growth spike does not translate into a steady increase in the number of daily transactions, VRA price could rebound once the current media euphoria subsides.
VRA Price Prediction: Possible reversal towards $0.003 after brief consolidation
The data points analyzed above indicate that the Verasity price is likely to return towards 0.30 after the current peaks in market demand subside.
The Global In/Out of Money Around Price (GIOM) data, which shows the distribution of entry prices of current VRA holders, also validates this bearish forecast.
It shows that if Verasity price fails to defend the initial support level at USD 0.0054, the bears could potentially force a reversal towards USD 0.003.
As shown below, the 603 addresses purchased 1.29 billion VRA tokens at the maximum price of $0.0054. If they were HODL they could put up a significant retaining wall.
But if network demand declines as predicted, the price could eventually fall towards $0.0028.
Still, the bears could lose control if Verasity price moves past $0.01. However, as shown below, 689 addresses had purchased 197.7 million VRA tokens at the minimum price of $0.0065.
If these holders want to make early gains, the VRA price could recover immediately.
But if the VRA bear loses that vital resistance level, the price could rise towards $0.01.