The Artificial Superintelligence Alliance [FET] has recently faced a downward trend, experiencing a 14% decline over the past fortnight. This bearish pressure has hindered any breakout from the descending parallel channel it has been following.
As of the latest figures, FET is trading at $1.18. The digital currency is encountering resistance at $1.34, which coincides with the upper boundary of the descending channel, while witnessing a decrease in buying interest.
The Relative Strength Index (RSI) currently stands at 37, signifying considerable selling pressure. Furthermore, the RSI has been consistently hitting new lows, reflecting a growing bearish sentiment.
There is also an upward movement in the Average Directional Index, indicating a robust ongoing downtrend that could persist unless there is a shift in demand.
Despite the prevailing downward trends on the daily chart, on-chain indicators are hinting at a potential bullish reversal.
Decline in FET Exchange Reserves
According to data from CryptoQuant, FET exchange reserves have markedly decreased over the past four days, going from 502 million to a weekly low of 497 million.
A reduction in exchange reserves can alleviate selling pressure and potentially lead to a decrease in selling activity revolving around FET, setting the stage for a recovery.
The drop in this metric also implies that the recent downtrend has purged less stable holders contributing to the heightened selling activity.
Increased Whale Trading Activity
Notably, there has been a noticeable surge in whale trading activities associated with FET. Data from IntoTheBlock highlights that large transactions exceeding $100,000 surged from 4.63M to 7.56M in a 24-hour period.
This uptick indicates a significant level of whale involvement in FET, potentially influencing the price positively if they are buying, or exerting downward pressure if they are offloading their holdings.
Given that whales hold a substantial 63% of the token’s supply, any heightened activity from them could result in substantial price fluctuations.
Prevalence of Long Positions
An examination of funding rates reveals that traders holding long positions in FET still outnumber short sellers.
Although long traders are currently paying a premium to retain their positions, a 5% drop in open interest suggests waning demand for new long positions.
The juxtaposition of positive funding rates with declining open interest points towards a weakening bullish sentiment in the derivatives market. Without fresh buying support and demand for long positions, the prevailing bearish sentiment might persist.