Raydium, the leading meme-coin trading platform on the Solana blockchain, has witnessed a significant 20% decline in its token valuation over the last fortnight.
Currently, RAY is consolidating near the $5 mark, facing mounting selling pressure from centralized exchanges. The crucial question now is whether the $5 support level will hold firm or give way under pressure?
RAY Treading a Tenuous Path
After reaching an all-time high of $6.5 in mid-November, RAY entered a phase of price consolidation that saw a gradual erosion of buying momentum, leading to increased selling pressure.
In December, RAY’s market dynamics turned bearish, evident from the Relative Strength Index (RSI) dipping below the crucial 50 level on the 12-hour chart. This bearish sentiment has hindered any meaningful recovery, tethering the altcoin to the lower limits of its trading range.
The critical question remains: Can the $5 support level withstand the current selling pressure? The possibility of a breach looms if selling intensifies in the coming days.
Nevertheless, the $5 threshold carries significant psychological and Fibonacci implications that could buoy the bullish sentiment. A breach could usher in a lower low, potentially flipping the market sentiment to bearish, with $3.6 emerging as the next major support level.
Conversely, if the $5 support holds, the path to $7.5 and $9.5 could open up as the bulls gain traction.
Intensifying Sell Pressure on RAY
Market data from Santiment indicates a steady rise in selling pressure (represented by the supply on exchanges, highlighted in red) throughout November.
Simultaneously, there was a noticeable decline in new demand (signified by supply off exchanges, depicted in yellow) for RAY during the same period. This stands in stark contrast to the robust buying trend observed in October, hinting that short-term holders cashed out profits in November and December.
The sell-off impeded RAY’s upward momentum, challenging any potential rally past the $6.5 mark until the pressure somewhat alleviated.
While the market downturn could present a strategic buying opportunity for long-term investors, traders focusing on short-term gains saw no clear signals in RAY’s evolving market dynamics.
For swing traders, a decisive weekly close above $5 could signify a strengthening market sentiment and a viable entry point. Such a move would enhance the prospects of RAY aiming for the mid to upper channel targets around $7.5.
Disclaimer: The views expressed in this article are solely the author’s opinion and do not constitute financial, investment, or trading advice.