Tellor (TRB) made a strong comeback, reaching the $40 mark on September 20, after experiencing a significant dip over the weekend. A combination of on-chain and derivatives market indicators sheds light on the potential for TRB to reclaim $50.

Focus on Real World Assets (RWA)

As investors shifted their attention to the Real World Assets (RWA) sector this month, TRB, along with projects like Chainlink (LINK), saw substantial gains.

Open Interest, Sept 2023 | Source: Coinglass

Concerns were raised last week about the TRB rally being driven by speculative short-term traders. Derivatives market data now indicates that TRB Futures speculative traders are scaling down their activity.

Price vs. Capital Inflows

Despite a 53% price rebound since dropping to $26 on September 18, futures traders have only increased Capital Inflows by 21% during that period. This suggests that the current TRB rally may be driven by short sellers covering their positions due to the rapid price increase.

Network Growth v Active Address, Sept 2023 | Source: Santiment

The Tellor network faces challenges in attracting new participants, with only 62 new TRB wallet addresses created on September 20, a 66% decline from the recent peak. Network Growth estimates indicate that the rally is primarily fueled by existing participants rather than attracting new demand.

Support and Resistance Levels

For TRB to sustain its high price levels, it must attract increased investor participation and capital inflow. Failure to do so could result in a significant retracement, potentially losing support at $30. On the other hand, if TRB gains traction and capital, it may aim for the $50 mark, though facing resistance from holders at that level.

GIOM data, Sept 2023 | Source: IntoTheBlock

While TRB shows promise, its ability to maintain current valuations relies on expanding its investor base and capital influx.