Disaster Looming As Serum Set For Bearish Divergence on the Weekly

Serum was in the news a few weeks back as one of the top losers. Many also feared that it would go down to zero following the FTX crash as it was affiliated with the CEO. Although it experienced the downtrends as most cryptocurrencies, price action afterward is noteworthy.

After the massive decrease in price, it saw more volatility compared to most assets. For example, last week, the previous session with gains of more than 93%. It was one of the top gainers during the period under consideration.

However, fears about the coin are on the rise again. This is because of several negative fundamentals around it.

Binance Delist Serum

Recall that the asset is affiliated with Sam Bankman-Fried and his company. In its latest bid to dissociate itself from anything FTX-related, Binance announced the delisting of the asset from its trading pairs.

This announcement came a few days after Serum had its fork. In response to this event, it enjoyed consistent surges. However, the latest delisting poses many threats to the next price action as the coin may see massive decreases.

A look at the chart shows SRM is seeing this effect already as it lost more than 9%. A look at the market data reveals further details on how it was affected. Its training volume dipped by more than 50%. Do the chart offer comfort?

Looming Downtrend on the Weekly Chart

We noticed one of the longest candles on the weekly chart since SRM’s introduction to the market. This stick represented price action two weeks ago. The massive downtrend left the saw the asset dip from $0.76 to a close at $0.13.

The next intraweek session was marked with more increases as the coin attempted recovery. Nonetheless, it closed with significant increases. We are seeing the current week as a doji as the cryptocurrency has not recorded any notable increases or decreases.

However, it experienced a massive surge that saw it peak at $0.36. These attempts at recovery have yielded no results as we observed most indicators still maintain their downward trajectory.

For example, the Moving Average Convergence Divergence is edging towards a bearish divergence as it is currently in the stage of converging. Once it completes this cycle, this may herald the start of another bearish round.

The Relative Strength Index offers very little comfort. We noticed that it trended a little above 30 over the last fourteen days. Massive downtrends could send it below and make the asset oversold. The daily chart sheds more light on when this may take place.

Price Uncertainty Rises

A look at RSI on the daily chart shows that serum is seeing an equal amount of push from both the bulls and bears. Nonetheless, on a few occasions, the bulls edged forward as we noticed a bid to surge above 40.

This also explains the reading on MACD as it’s on the uptrend. This may mean that before the start of the bearish round. The asset under consideration may experience little price increases that may send it, testing key levels. Let’s examine these marks.

Key levels to Watch

Vital Support: $0.10, $0.20

Vital Resistance: $0.30, $0.40, $0.70.

 

Bearing in mind that SRM may experience a little uptrend before the downtrend, we may see it retest and flip the $0.30 resistance. It may continue the increase and see the $0.40 barrier.

However, this may mark the start of the bearish round. One reason for this conclusion is that previous attempts at it over the last fourteen yielded very little result. It may experience massive rejection and retrace.

One of the key levels to keep an eye on is the $0.20 support. Before the dip that saw serum dip to a low of $0.11, it never tested this mark since its introduction to the market. Additionally, after it reclaimed it, it has held on to it for more than ten days now.

If this key level fails, we see a retest of the $0.10 support. Previous attempts failed and it is the toughest on the list. Failure to sustain this mark will guarantee a drop to the sub-$0.10. While the $0.70 look unattainable at the moment, it is worth noting as a flip of the resistance may guarantee further increases.

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