Raydium [RAY] experienced a significant drop of almost 20% from its peak on January 30th. The recent decline followed by a bounce back was quite substantial, leading to the liquidation of many leveraged traders and instilling fear in investors.
The ongoing struggle of RAY bulls with the resistance zone between $6.3 and $6.5 seems poised to continue. Although they managed to break through this level just sixteen days ago, the question remains whether they can replicate this feat once more.
Evaluating Raydium’s Price Performance
Raydium had been trading within a range defined since November and lasting until mid-January. Recently, technical indicators hinted at a potential shift in the short-term trend following the recent losses.
The price swing between $7.92 and $4.15 marked the key levels on the H4 chart. The bounce back from the lower end of the range at $4 and the subsequent test of the $5.17 support level in the middle of the range within the last 24 hours indicated a positive response to adverse market news.
The Chaikin Money Flow (CMF) crossed above +0.05, indicating notable capital inflows. Additionally, the 20-period moving average was on the brink of being breached. Despite these signs, the market structure remained firmly bearish.
The Bollinger Bands displayed significant width, underlining Raydium’s high volatility. The upper Bollinger Band was likely to act as a short-term resistance level.
A potential breakthrough past $6.3 followed by a period of consolidation could present a buying opportunity, although market conditions remained uncertain.
Analyzing the liquidation heatmap revealed prominent magnetic zones at $6.64 and $5.7, with the former being both closer and more robust.
Hence, the chances of a surge towards $6.7-$6.8 in the near future seemed quite plausible.
There is also a possibility of a retest of the psychological level at $7. Given the prevailing bearish outlook, long-term traders might want to consider locking in profits.
For those with a longer-term perspective, it might be prudent to wait for a positive market response in the $6.5-$7 range before making any further investment decisions.
Disclaimer: The views expressed are purely the author’s opinion and should not be considered as financial, investment, or trading advice.