Waves (WAVES) lost around half its value in April so far and risks further correction due to weakening technical and fundamental factors.
WAVES price risks another 30% decline
WAVES dropped from nearly $64 on March 31 to around $27.50 on April 7 — down by over 55%. As it fell, the WAVES/USD pair also broke below a key support confluence, hinting further correction.
Notably, the confluence comprises WAVES’ 50-day exponential moving average (50-day EMA; the red wave) and the 61.8% Fib line of the Fibonacci retracement graph — drawn from $64-swing high to $8.34-swing low.
Now broken, they suggest that WAVES’ path of least resistance is to the downside, with $25 acting as interim support due to its historical relevance as a price floor in October 2021 and March 2022.
Additionally, WAVES’ daily relative strength index (RSI) also shows room for a further decline, being only 11 points away from slipping below the “oversold” threshold of 30.
Meanwhile, breaking below $25 would risk crashing WAVES’ price to its 200-day simple moving average (200-day SMA; the orange wave) near $20, coinciding with the 0.786 Fib line, about 30% lower than April 7’s price.
The bearish setup emerged amid allegations in a Twitter thread that the Waves Platform was the equivalent of a “Ponzi scheme.” Penned by 0xHamZ, the thread accuses the Waves’ team of artificially inflating the price by more than 650% from February to March.
Meanwhile, Neutrino USD, a “stablecoin” backed by WAVES reserves, also lost its U.S. dollar peg following 0xHamZ’s accusations, further dampening market sentiment.
Related: Bitcoin slides below $44K in April first as trader warns ‘something is off’ with BTC
Jolyon Horsfall, the co-CEO of nonfungible token (NFT) prediction platform SparkWorld, noted that the Waves Platform founder, Sasha Ivanov, “will need to step up if the token is to be revived and the project re-aligned on its ambitious path.” He warned:
“For the time being, the dumping is expected to continue, and the WAVES price may fall to its 30-day low of $21.”
Bull flag retest?
However, WAVES shows some signs of defying bearish predictions while keeping its long-term uptrend intact.
Notably, the ongoing correction brings WAVES closer to testing another double-layered support zone, defined by its 20-week EMA (the green wave) and the upper trendline of its previous “bull flag” setup, as shown in the chart below.
A bounce from this weekly support confluence could see WAVES rally to test its “bull flag” target near $70.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.