• BAND, the native token of the Band Protocol, rose by as much as 384 percent in the third quarter.
• The supersonic price rally appeared amid the ongoing DeFi craze – and also following Band’s growth-oriented partnerships.
• Nevertheless, the BAND/USD pair stands overbought, which points to an imminent downside correction ahead.

An explosive buying spree in the DeFi sector has sent one of its tokens up by 384 percent on a quarter-to-date (QTD) timeframe.

Dubbed as BAND, the cryptocurrency is a native asset of Band Protocol, a decentralized oracle that serves as a layer-2 protocol on public blockchains. On July 20, the BAND price established an all-time high at $5.25. At the start of this month, it was trading for $1.05.

BAND price logs up to 2,287 percent gains YTD. Source: TradingView.com

BAND also jumped higher against Bitcoin, the top cryptocurrency by market cap. As of Wednesday, the BAND/BTC pair was trading 341 percent higher QTD at 51,200 sats.

What’s Pumping BAND

A calm and composed Bitcoin, coupled with an ongoing craze for decentralized finance tokens, appears to have helped BAND logging a supersonic price rally.

Prediction market and oracle cryptocurrencies came into trend during the second quarter. BAND’s closest rival, Chainlink, for instance, emerged as the market leader after rallying by 305 percent in 2020. A large portion of those gains came during Q2.

Backing the oracle rallies were project upgrades and partnerships. Chainlink usage in the DeFi space grew as more and more projects sought it for its data feed services. The market cap of these DeFi projects itself grew by two-fourfold, contributing to an increase in demand for the Chainlink’s LINK tokens.

DeFi sector performance in Q2/2020. Source: Messari

The Band Protocol showed a similar growth-oriented trend. The last two months saw the project providing oracle solutions to a plethora of DeFi projects. Its latest announcement came on Wednesday, stating that ICON, a blockchain network, will integrate BAND-powered data solutions onto its platform.

Earlier in July, the Band Protocol entered partnerships with Waves, Neutrino, BetProtocol, Wanchain, and other blockchain-enabled projects. Each deal signaled a higher growth rate for BAND, which, in turn, translated into a price rally.

Correction Risks

The DeFi rally appears attractive but, at the same time, risks becoming an overblown move. Most of the tokens that rose by 100-400 percent in Q2/2020 now stands technically overbought. It has increased their likelihood of correcting lower.

While #BNB is going strong, some of our portfolio projects are also doing well. M&A: $SXP, LaunchPad: $BAND & $KAVA, and investment: $LUNA. All top 24hr gainers.

What season comes after winter? al____ pic.twitter.com/RN5l7hdgik

— CZ Binance (@cz_binance) July 20, 2020

BAND faces the same risks. The cryptocurrency’s Relative Strength Index readings currently stand at 86. That puts BAND in the overpriced category, which may lead to a massive bearish move.

The coin earlier pulled back from its all-time high by 30 percent. Nevertheless, sustained upside momentum in the DeFi market helped its recover back. It continues to trade under its record peak.