WAVES: Is it safe to swim without a life jacket at the current price point?

WAVES has traded within the narrow range for nearly two weeks with little up or down movement. However, this is subject to change, especially due to the death cross of recent price action.

WAVES pushed through the weekend as the 50-day moving average broke below the 200-day moving average. This action effectively formed a death cross, often seen as a bearish signal. If this is true, we should expect WAVES to move out of its narrow range for a bearish one.

The death cross comes at an unusual time when WAVES has barely noticed any price action for nearly two weeks. It was trading at $5.94 at the time of this report, which means it is still within its historical lows.

Source: TradingView

WAVES is also oversold at its current price level, according to RSI, and has been so since the May 12 low. Also, the current money flow indicators show some signs of accumulation, with some retail purchases falling recently. The directional movement indicator reflects the recent performance of WAVES, indicating a lack of directional momentum.

Is WAVES emitting a mixed signal?

The death cross is expected to point to further declines, but the WAVES are currently heavily oversold and a bullish recovery is expected. This conflicting situation may explain why investors are cautious about buying back shares at continued low prices. Perhaps on-chain metrics can help us navigate this fog of uncertainty.

WAVES’s FTX funding ratio has recovered to a good level so far, indicating healthy demand in the derivatives market. Unfortunately, derivatives do not directly affect spot prices, but the same indicators provide a yardstick for estimating demand in the market.

The supply held by the whale metric has grown over the past two days, suggesting that some whales are available to buy.

Waves WAVES 11.23.17 23 May 2022

Source: Santiment

There seems to be some healthy development activity when it comes to the Waves network. This should help improve investor confidence given the bearish price action.

What can we do with this?

Whale accumulation levels are still too low to offset the selling pressure, so the token is likely to decline. However, a sudden shift in investor sentiment in favor of bulls may provide some clarity. The global cryptocurrency market cap is now up 3.39% and further gains could trigger a positive price action for WAVES.

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