After the 20 EMA (red) refuted most of the recent recovery attempts, the seller has adjusted the trend in his favor by dropping the price below the lower trendline of the downward channel (yellow). This trajectory has affected buyers’ ability to negate selling pressure, with Alt hitting a multi-month low.
A possible recovery from this level could lead to compression near the 23.6% Fibonacci resistance. A broader range of sentiment would make a strong statement for the bulls to test the 38.2% level. At press time, SAND was trading at $1.39, down 24% in the last 24 hours.
Sand Daily Chart
The bears have consistently marked lower highs since reaching ATH last year, while the bulls failed to trigger a trend correction rally. This plunge visibly portrayed superior bearish vitality, while price action moved below the downward channel.
The latest buy rally on May 1st stopped at the 20 EMA. As a result, SAND is down nearly 57.6% over the past six days. Similar to the market crash of the previous day, SAND hit an eight-month low on May 11th.
The price of SAND has been leaning towards the ‘cheap’ side for a while as the price action continues to test the boundary of the lower Bollinger Band (BB) band.
So the possible resurgence should not surprise traders. The $1.5 area is important to identify possible rallies in the future. Closing the current candlestick with a shorter body could confirm a bullish hammer and increase the chances of a revival.
The relative strength index suggested that the seller had a tangible advantage in the current scenario. Although we did not find an area above the oversold indicator, buyers still had to push more to push the price to break its current boundary at the $1.5 level.
The CMF also displayed a bearish edge, but recent movements hinted at a bullish divergence with the price.
While the market structure supported the bearish narrative, oversold figures for the BB and RSI along with a bullish divergence with the CMF maintained hope for a future recovery.
Moreover, alt shares the surprising fact that the 30-day correlation with King Coin is 92%. Therefore, it is important to keep an eye on Bitcoin’s movements to complement these technical elements.