Will RIVER Crypto Dip to $7.72 as Short Leverage Increases?

RIVER (RIVER) is currently facing a challenging market, having dropped 17% over the last 24 hours, significantly below January's peak price of $87. As negative price trends continue, the key focus is on the possibility of the asset dropping further, potentially reaching $7.72, amidst rising short leverage and diminishing market activity.

Key Takeaways

RIVER has decreased by 17% in the last 24 hours, now trading far below previous highs.
The price is approaching the $7.72 mark, influenced by significant sell pressure and rising short positions.
Long liquidations have overshadowed shorts significantly in recent days, increasing selling pressure.
A lack of network activity further complicates the crypto's performance, reflecting bearish market conditions.

Will RIVER crypto drop to $7.72 next amid rising shorts leverage?

RIVER Prices Approach Important Levels

The current price chart indicates that RIVER is moving within a handle pattern, with expectations of further declines that align with a head-and-shoulder formation. The cryptocurrency is trending towards the $7.72 price point as capital outflows reach overextended levels. The Money Flow Index (MFI) currently sits at 14.24, suggesting extreme selling pressure.

Additionally, Open Interest (OI) has been increasing alongside the price drop, revealing a clear divergence. Over the past five days, OI nearly doubled, rising from $1.46 million to $2.33 million. This trend shows that traders are favoring short positions and are using leverage to strengthen these bets.

RIVER Price Chart
Source: RIVER/USDT on TradingView

Historical data indicates that the $7.72 level could act as a temporary halt in the downtrend. Insights from the 4-hour chart reveal that bulls have previously defended this level, consolidating above it for an entire week. A pause might create an opportunity for a price rebound toward the $20 resistance level.

The OI-Weighted Funding Rate is also currently in negative territory, at 0.0086%, according to CoinGlass. This suggests that sellers are paying additional costs to maintain their short positions, resulting in an increase in long liquidations.

Long Liquidations Lead the Market

CoinGlass data shows that long liquidations have taken precedence in the past four days, with total long liquidations amounting to $564K, almost double the $291K figure for shorts during the same period.

Liquidations
Source: CoinGlass

This surge in liquidations has generated a long squeeze, amplifying the selling pressure on RIVER. As these liquidations occurred, network activity also reflected the bearish trend, showing fewer transactions during price declines.

Diminished Network Activity

Beginning in March, the volume of RIVER tokens transferred dropped significantly, declining from 18,631 tokens to just 8,413 tokens. The total number of transfers also fell from 962 to 460.

Network Activity
Source: Etherscan

While high network activity usually correlates with price strength, a decrease in activity tends to exacerbate bearish conditions. In this case, the slowdown in network usage has contributed to the overall decline in RIVER's price.

Conclusion

In summary, RIVER is experiencing significant downward pressure influenced by increasing short leverage and diminishing network activity. Key levels, such as $7.72, are critical to watch as traders navigate this challenging market environment.