Evaluating Canton: Will $0.120 Hold Amid Price Decline?

Canton has been struggling as it breaks below a key wedge pattern, entering a phase where sellers are exerting more control over the price. As the price hovers around $0.1243 after a daily drop of 5.35%, various factors such as increased liquidation of long positions and significant outflows from exchanges are defining its short-term outlook.

Key Takeaways

Canton has lost its upward structure following a wedge breakdown, with repeated lower highs indicating heightened bearish pressure.
An increase in Open Interest, significant long liquidations, and sharp outflows from exchanges are shaping Canton’s immediate price risk.
The market is witnessing growing volatility and diminishing bullish momentum, allowing sellers to assert control at crucial intraday levels.
Recent price movements reflect a drop to $0.1243, reinforcing increasing pressure within short-term trading.
Canton faces challenges as it approaches a sensitive support area, leading to potential spikes in volatility.

Canton price drops toward major support as sellers increase pressure

Canton Faces Challenges After Wedge Break

Canton has recently fallen below its rising wedge pattern, with prices gravitating towards the support zone between $0.123 and $0.120. The 1-hour chart indicates a pattern of consistently lower highs, with each attempt at rallying losing momentum more quickly than the previous one. The candles reflect a pronounced downward trend, as seller sentiment grows stronger whenever resistance points are tested.

Resistance around the $0.1339 mark signifies significant selling interest, acting as a ceiling during each upward attempt. Buyers are managing to guard against a drop to $0.126, although this effort is thinning due to increasing bearish influence. The current market structure is compressing toward this key support level, which could lead to a decisive movement—either a strong bounce or a deepening drop.

Canton price analysis Source: TradingView

Significant Exchange Outflows Signal Market Shifts

Recent data reveals a sudden outflow of $385K from exchanges, indicating a major shift in liquidity away from trading platforms. Traders seem to be scaling back their exposure as the volatility rises with each downward movement. This reaction is common when market participants anticipate turbulence near crucial support areas. However, reduced selling pressure due to these outflows can sometimes facilitate a rebound when sellers take a step back.

The timing of this outflow coincides with the wedge breakdown, reinforcing a bearish sentiment. A drop in exchange liquidity can result in heightened sensitivity to sharp price movements, meaning smaller trades might lead to more significant price changes.

Source: CoinGlass

Open Interest Rises as Traders Adjust Positions

Open Interest (OI) has increased by 4.43% to $25.46 million, as many traders expand their strategies ahead of a test of the support level. Rising OI typically suggests that bearish traders are positioning themselves in anticipation of rising short interest.

However, some participants are preparing for a potential bounce, leading to mixed leverage on both sides and increasing market volatility. Strong reactions are likely because rising OI near key levels usually signifies pivotal market movements.

Source: CoinGlass

Liquidations Pile Up as Buyers Struggle

Liquidation data has revealed numerous wipeouts of long positions, confirming that bullish traders are losing control as each upward bounce falters. Sellers maintain pressure, with every failed bullish attempt reinforcing their confidence. The prevalence of red liquidation bars indicates strong bearish dynamics in the market.

Despite ongoing attempts to absorb dips, buyer energy is waning as sellers build momentum. Each instance of liquidation fosters an increase in short positions, perpetuating a cycle of bearish sentiment. Canton’s trading pattern remains fragile, with continued liquidation signals suggesting a higher likelihood of further downward movement unless established support can prompt a stronger counter-reaction.

Canton liquidation chart Source: CoinGlass

In conclusion, the evidence points toward a potential deeper decline for Canton, driven by the recent wedge breakdown, steady lower highs, rising Open Interest amid a price drop, and persistent long liquidations that all reinforce bearish control. With prices approaching the $0.123–$0.120 support zone, the outlook favors potential continued declines. However, the substantial $385K outflow could lower exchange liquidity, which might pave the way for quick relief bounces. Hence, while the market shows a bearish inclination, a minor chance for a rebound still exists.