Render Token Price Down 6% As DAO Approves Burn And Mint Framework

Render Token price has dropped over 6% making it the fourth largest loser over the last 24 hours despite the news that the protocol had received approval from its Decentralized Autonomous Organization (DAO) to implement a burn and mint mechanism. The native token of the Render Network, RNDR, is trading at  $1.59 with a 24-hour trading volume of $183 million, down 26% on the day. 

It has a live market cap of $405.9 million, which has also dropped by 5.64% over the same time frame. This places RNDR at #97 according to the CoinMarketCap ranking. 

Render’s Burn And Mint Mechanism To Drive RNDR Higher

The Render Token price has produced a sustained uptrend, recording over 105% over the past week and an amazing 275% increase in the last 30 days, according to data from CoinMarketCap. 

As a decentralized GPU provider, the Render Network connects 3D artists with node operators who have GPUs that are not in use and are needed to process the renders. The Render DAO suggested that RNDR be made a medium of exchange for the ecosystem allowing payments between operators and artists through a burn and mint equilibrium (BME) mechanism. 

According to the proposal, the 3D artists would be required to burn a certain amount of RNDR tokens for them to receive non-fungible credits which would be given out to node operators. 

The BME mechanism is primarily aimed at making RNDR a commodity asset with a long-term goal of making it deflationary. Governance deliberation and voting on the proposal started during the last week of January with the Render DAO unanimously approving the implementation of the BME mechanism. 

The RNP-001 vote is officially closed! Final results: -210mm RNDR cast to approve, -3.7k RNDR cast to deny. https://t.co/nqAij4vm8h pic.twitter.com/Rf7SJ2Ctwk

— The Render Network (@rendernetwork) February 1, 2023

In the meantime, the team behind the Render Network has given an outline of how it is going to create a balanced emission schedule that will appropriately reward artists, node operators, and liquidity providers.

Render Token Price Trades Within A Significant Zone

For a long time, RNDR price traded in a wide range stretching from $0.39 to $0.84. The Render Token was locked within this region between May and December. A recovery wave that was initiated on January 9 saw it escape from this consolidation zone. 

The buyers managed to pump the price above another significant zone ranging between $1.47 and $1.73, with an aim of turning into a support zone. Their efforts were frustrated at around $1.79. At the time of writing, the altcoin was still trading below $1.73. Buyers need to flip this area back into support to sustain the uptrend.

Buyer congestion in the said zone is likely to provide the tailwinds required to propel RNDR above the $1.73 resistance level. Such a move would confirm a continuation of the uptrend that is likely to take the Render token price first above Thursday’s high around $1.79, and then to the $2.15 range high. Above that, RNDR could rise to confront resistance from the $2.5 psychological level, marking a 57% ascent from the current price. 

RNDR/USD Daily Chart

The Moving Average Convergence Divergence (MACD) indicator is moving upwards further away from the neutral line, suggesting that the bulls were in full control of the Render Token. In addition, the upward-facing moving averages have just sent a call to buy RNDR. This came in the form of a ‘golden cross’ that appeared once the 50-day Simple Moving Average (SMA) crossed above the 200-day SMA on January 29, indicating that the uptrend was strong.

Moreover, on-chain metrics from IntoTheBlock’s In/Out of the Money Around Price Model (IOMAP) model further supported Render Token’s upside. According to the IOMAP chart below, RNDR sat on relatively robust support at $1.53. This is within the $1.47 and $1.73 zone described above and is where approximately 5.81 million RNDR were previously bought by 323 addresses.

Render Token IOMAP Chart

Any attempt to push the price below the said level would be met by buying from this demand zone preventing any further declines. The ensuing buying pressure would cause the Render Token price to rise even higher.

On the downside, the Relative Strength Index (RSI) was facing down. Moreover, this momentum strength indicator at 78 showed that the token is currently overbought and that a trend reversal was underway.

As such, a daily candlestick close below the immediate support at $1.53 could see the token drop first toward the lower limit of the demand zone at $1.47 and later to the $1.0 psychological level. In highly bearish cases, the RNDR price may revisit the SMAs or drop lower back into the $0.39 and $0.84 consolidation zone where it could spend some time before making another attempt at recovery. 

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