SEI Must Regain KEY Support to Prevent a Drop Below $0.07

In times of heightened fear and overall weakness in the cryptocurrency market, even robust projects can feel the impact. Recently, Sei (SEI) has faced mounting pressure as sellers maintained control and market sentiment remained fragile.

Key Takeaways

SEI lost crucial support at $0.1206, leading to vulnerability and potential declines.
Despite weak spot prices, derivatives trading surged, indicating rising speculative interest.
Whale participation remains significant, showing active positioning amidst market turmoil.
SEI needs to reclaim the $0.1261 level to stabilize; failure could push it towards $0.0689, while a move above $0.20 could alleviate downside risks.

Over the past week, SEI's value dropped after losing key support, slipping into a precarious zone. Data from the spot market indicated that whales were actively selling, confirming that the downward pressure was not merely due to retail panic. Once the $0.1206 support level broke, liquidity conditions worsened rapidly. This breach left SEI open to deeper declines, potentially approaching $0.0689, a region where historical demand has previously surfaced.

Without a swift recovery, overall confidence diminished, creating real risks of further selling pressure as market participants shifted focus from potential gains to damage control and preserving liquidity.

SEI breaks key support, yet leverage builds—is downside exhaustion near?

Why Are Traders Increasing Exposure as Prices Fall?

Despite the overall weak spot performance, the derivatives market for SEI showed remarkable activity. As of the latest updates, SEI derivatives volume surged to $32 million in just 24 hours, demonstrating increased speculative interest. Concurrently, Open Interest (OI) increased along with the volume, signaling that traders were adding to their positions rather than liquidating them. This trend reflects a proactive strategy among traders rather than a panic sell-off.

Source: CoinGlass

Increased volume and Open Interest during price dips can indicate a strong belief in potential volatility. Traders seem willing to make directional bets, anticipating greater price movements. However, this inclination also introduces heightened liquidation risks, especially since prices are trading below previous support levels. A sudden price swing could instigate forced liquidations, intensifying volatility in either direction.

Whale Orders Remain Active!

The trend of Average Order Size in the spot market indicates persistent engagement from whales as SEI's price trends lower. This suggests that large players are actively positioning themselves in the market rather than simply selling off due to retail movements.

Source: CryptoQuant

Large orders have continued to emerge even amidst falling prices, indicating a combination of distribution and absorption. This activity shows that larger market players are influencing direction even in declining sentiment.

Can SEI Reclaim Control Before Liquidity Takes Over?

Current momentum indicators indicate ongoing weakness, although there are early signs of stabilization appearing. At this moment, the Relative Strength Index (RSI) remains low, indicating limited bullish strength, but there is a noticeable decrease in sell pressure. The Moving Average Convergence Divergence (MACD) is negative; however, the histogram shows signs of reducing downside momentum, with the blue line moving upward toward a potential bullish signal.

Source: TradingView

To change the course, SEI needs to decisively reclaim the $0.1261 range. A clear move above this level would help ensure that the previous support does not turn into resistance. Failure to regain this level keeps fear at the forefront, maintaining the focus on the $0.0689 lower threshold. On the contrary, a bounce back above $0.20 could substantially shift market dynamics and relieve some of the downward pressure.

Final Thoughts

Overall, SEI’s ability to navigate these challenging conditions largely depends on its capacity to reclaim crucial support levels. As the market evolves, traders will be watching closely for signs of recovery or further declines.