Berachain (BERA) has also been on a stunning uptrend, rising more than 35% in the last week and gaining strength after consolidating.
BERA was trading at $7.89 at the time of writing, slowly approaching a key resistance of $8.34. A breakout above that would open the doors to more upside, with the asset possibly being pushed toward the psychological mark of $10.
Technical Indicators
The Relative Strength Index (RSI) has risen to 59, reflecting rising buying pressure but still leaving some room for further upside. An RSI value above 70 would reflect overbought levels and may initiate a pullback. Traders are watching this closely as it approaches the overbought region.
Bollinger Bands reflect tightening price in a range, with near support at $6.53 and a firmer floor at $5.14. Both the 10-day and 20-day Exponential Moving Averages (EMA) provide support for further price growth, affirming a bullish trend.
Also, the Moving Average Convergence/Divergence (MACD) gauge is still bullish at 0.282, indicating sustained momentum. Yet, the 24-hour trading volume has fallen 33% to $187.7 million, indicating some letting up in the buying pressure.
A volume breakout would be necessary to sustain present momentum and indicate a breakout through resistance.
On-Chain Data Supports Bullish Sentiment
On-chain indicators also support Berachain’s bullish argument. The total value locked (TVL) on the network has increased to $3.14 billion, approaching its all-time high of $3.26 billion set on March 3, DefiLlama reports.
Between March 23 and March 25, decentralized exchange (DEX) trading volume jumped from $36 million to $132 million, showing more investor activity. In the meantime, the stablecoin market cap in the Berachain ecosystem has hit an all-time high of $1.2 billion, proving strong demand for liquidity.
Proof-of-Liquidity System
Berachain’s recent surge comes on the heels of the introduction of its groundbreaking Proof-of-Liquidity (POL) system on March 24. This widening of governance and emissions outside its native BEX pools has brought new vaults that share BGT emissions.
Active incentives reached $355,000 within hours of its release, with the highest vault commanding a staggering annual percentage return (APR) of more than 200%.
This mechanism is likely to be responsible for the price appreciation of BERA, with more users participating in the ecosystem to receive rewards.
Can Berachain Sustain Its Momentum?
In spite of the positive signs, BERA is still 45.8% down from its all-time high of $14.83. The important level to observe is $8.34 if the asset is able to close firmly above this resistance, it may be setting up for additional gains towards $10.
A failure to break through this level, however, may precipitate a pullback to the $6.53 or $5.14 support levels.
Moreover, the movement of the RSI will be instrumental in deciding the direction of the asset in the next move. If it moves above 70, overbought levels may trigger profit-taking, and a short-term correction may ensue.
But if the RSI settles while prices keep going up, BERA may be on the verge of a long-term uptrend.
For the time being, Berachain traders can keep a close eye on resistance levels with a watch on volume trends and on-chain activity as further proof of where the market will trend.
Whether or not BERA can maintain its upward trend or correct will be heavily reliant on ongoing buying pressure and investor sentiment.
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