REEF digital currency, the native coin of the Reef blockchain, prolonged its decline midweek to a substantial 80% in just 24 hours. It tumbled from $0.01 to $0.002, causing unease among investors, particularly those who recently embraced the token.
The sharp decline was chiefly propelled by leveraged bears, with Open Interest (OI) soaring by 8.7 billion REEF as the price descended. This indicated that more traders initiated leveraged short bets, pushing REEF further down on the charts.
Nevertheless, REEF experienced one of its most remarkable recoveries since September, skyrocketing by a staggering 1500% subsequent to its delisting from Binance spot trading in August. So, what insights can be gleaned regarding its future potential?
REEF’s Sentiment Surges to a Monthly Peak
Source: Santiment
At the moment, REEF’s Weighted Sentiment has made a turnaround and escalated to a monthly peak, indicating that speculators are optimistic about the token’s upward potential following the slump. This trend could potentially signify a reversal in the token’s price.
However, a notable supply pressure persisted on exchanges. Santiment’s data highlighted a surge in supply on exchanges, pointing out that a considerable amount of REEF tokens were transferred to centralized exchanges for liquidation during the sell-off.
Furthermore, the supply outside of exchanges declined, suggesting a weak accumulation pattern for the token. This combination of low demand and high supply pressure does not bode well for a strong price reversal for REEF, at least for the current moment.
In addition, signs of short-term supply pressure were evident among sophisticated traders on the Binance platform. According to the Top Trader Long/Short ratio, 51% of positions were shorting the asset.
In essence, despite the improved market sentiment, traders remain cautious about a potent rebound, judging by their current positions.