SEI Faces Critical Test as 193-Day Support Weakens After 37% Drop

SEI, the native token of a modular layer-1 blockchain, has experienced a sharp 37% decline in the past month, leaving it trading nearly 80% below its all-time high. The token now hovers near its 193-day support level at **$0.23**, raising concerns about whether it can rebound or if further drops are imminent.

 Key Highlights

– Head and Shoulders Pattern: A prominent head and shoulders formation on the daily chart has accelerated SEI’s double-digit decline.
– Weak Support Levels: The support around **$0.23** is currently fragile, and without renewed buying pressure, the price could slip to around **$0.18**.
– Increased Trading Volume: Despite a 55% surge in trading volume over the past 24 hours, the price has only seen a modest 3% increase, indicating that the current momentum may not be sustainable.

Recent Price Action

SEI’s price has been under heavy selling pressure recently, forming a pattern reminiscent of its early 2024 performance when the token once rallied to an all-time high of **$1.14**. By August 4 of that year, however, the price had tumbled to **$0.23**, which then supported a recovery to **$0.70** last December. Currently, trading near the **$0.23** support level, SEI is struggling to maintain its position.

Technical Analysis: Bearish Signals

One major technical indicator is the head and shoulders pattern identified on the daily chart. This pattern, consisting of a lower left shoulder, a higher head, and a lower right shoulder, suggests a shift from bullish to bearish momentum. The break below the$0.34 neckline contributed to a drop in price to around $0.26.

Additionally, the Relative Strength Index (RSI) remains below the 50-mark while SEI trades at $0.23, reflecting neutral momentum and a lack of robust buying interest. Further validation comes from the **Money Flow Index (MFI)** on the 4-hour chart, which, despite several attempts, failed to sustain an upswing. This downward trend in the MFI signals diminishing buying pressure, suggesting that the current support at **$0.23** might not hold.

 Scenario 1: Further Decline
If SEI fails to gather sufficient buying pressure, it may struggle to break above the **$0.236** Fibonacci retracement level at **$0.26**. In such a case, the next potential target could be around **$0.19**. This scenario would indicate that the bearish momentum is set to continue, pushing the token further down.

Scenario 2: Recovery and Upside Potential
On the other hand, if the **$0.23** support holds and new buying interest emerges, SEI might reverse its downward trend. A sustained recovery could see the token breaking above the **$0.30** resistance level. Once past this hurdle, technical indicators suggest that SEI could rally towards **$0.37**, with even higher targets—up to **$0.42**—if overall market conditions turn highly bullish.

What Investors Should Watch

Investors should keep a close eye on key support and resistance levels:
– Support: The critical level at **$0.23** must hold to prevent further declines.
– Resistance: Watch for any breakthrough above **$0.30**, which could trigger a bullish reversal.
– Momentum Indicators: A drop in RSI below 50 and a downward-turning MFI signal continued selling pressure, while a recovery in these metrics might suggest a shift in sentiment.

 Conclusion

SEI is currently at a crossroads. The formation of a head and shoulders pattern and weak support at **$0.23** have cast doubt on its short-term recovery prospects. If buying pressure does not pick up, SEI could fall further to **$0.18** or even lower. However, if the support holds and technical indicators improve, the token could embark on a recovery, potentially rallying to **$0.37** or higher. As always, investors should exercise caution and closely monitor the evolving market dynamics surrounding SEI.