Sei [SEI] experienced substantial increases during the recent relief rally, hinting at a possible further upswing. The primary layer altcoin successfully turned the immediate supply area at $0.28 into a level of support and has been consolidating just under $0.30 for the past two days.
SEI registered a 15% surge, climbing from $0.25 to $0.30 earlier in the current week. The question now arises: can the bulls sustain this winning streak?
SEI: A Period of Relative Stability Before Potential Volatility?
Throughout Q3, SEI demonstrated a consistent pattern in its price movement. Each downward trend was reversed at $0.25 in both July, August, and September, establishing it as a crucial support level for the third quarter.
In the previous two instances where SEI rebounded from this support level, it aimed for $0.35, resulting in a 35% uptrend after surpassing the barrier at $0.30 (indicated in red).
The present trend seems to mirror the patterns of the past two quarters. The recent recovery at the beginning of the week already delivered a 15% gain for SEI. Nevertheless, at present, the obstacle at $0.30 remains unconquered.
However, technical indicators on the chart suggested a potential upward movement towards $0.35 for SEI. Notably, the Relative Strength Index (RSI) indicated that the current conditions were not yet overbought, leaving room for further recovery.
If history repeats itself with the Q3 pattern, bullish investors in SEI may consider entering the market once the breakout retests at $0.30. The initial targets would be $0.35 and $0.39, respectively.
Nonetheless, a breach beneath the Q3 support level would negate the aforementioned positive outlook.
Insights from On-chain Data and Derivatives Market
Based on Artemis data, the number of daily active addresses within the Sei network exhibited a notable uptrend since early September.
This metric surged from under 25K to over 55K in recent days, suggesting an increase in network activity that could support the ongoing price recovery.
In daily trading, SEI witnessed a 5% increase on Friday. This rise was accompanied by an 8% uptick in open interest rates (OI) and a 41% surge in trading volume across the derivatives market.
These developments signified a substantial injection of liquidity into SEI from traders anticipating further price appreciation. The prevailing optimistic sentiment towards the altcoin was further reinforced by the dominance of long positions at 52%.
Nevertheless, any steep declines in Bitcoin [BTC] could potentially drag SEI down and undermine the optimistic outlook for the altcoin.