SEI is gearing up for a rally after crashing for months on end. With the token hitting its 8-month low, reaching $0.135, historic data shows that the SEI is on the verge of reversing its downtrend.
SEI has been on a downtrend ever since its prices crashed below the 200-day Moving Average (MA). The token crashed from as high as $0.39 to a low of $0.12 during the crash. However, this is not the first time that a crash like this has happened. Just a few months ago, the token crashed in a similar manner.
Death cross makes the crash worse
In the middle of both these crashes, there was a death cross, which worsened the crash. During a death cross, the 200-day MA crosses the 50-day MA below, showing the weakening momentum.
But it’s not just the death cross that makes both these crashes similar, but the recovery, too. After SEI hit its floor price close to $0.135, it started to recover, ending the downtrend. Currently, SEI is at that same level after the prices have crashed, and from this point onwards, the price should surge. Given that SEI follows its historic behavior, it will aim at hitting $0.35.
Technical indicator hints at a rebound
The Relative Strength Index (RSI) indicator supports the above thesis. How? The RSI usually moves in unison with the prices. If the prices are making higher highs, the RSI follows by making higher highs. But in the event that RSI does not follow the prices, then a divergence occurs.
On the chart above, there is bullish divergence. The prices are making lower highs while the RSI is making higher highs. This divergence shows that downward pressure is weakening.
Although price continues to fall, the RSI reveals that buyers are quietly gaining strength. Momentum often shifts before price does, so this setup shows signals of weakening bearish strength and building bullish momentum, which is an early sign of a possible bounce or reversal.
