The cryptocurrency River (RIVER) is currently experiencing a significant decline, dropping by 17% in the last 24 hours. This drop has pushed its price well below the peak it reached in January at $87.
Despite showing signs of potentially invalidating a head-and-shoulder pattern on the daily chart, River continues to decline.
With River now on its sixth consecutive day in the red, it is clear that the pattern is firmly in play. The key questions now revolve around how much further the price could drop and the driving factors behind this decline.
River Prices Heading Towards…
Trading within the handle pattern on the price chart, River is expected to see further decline in line with the head-and-shoulder pattern.
Capital outflows have pushed River towards the $7.72 zone, with the Money Flow Index (MFI) currently at 14.24, indicating extreme sell pressure.
Open Interest (OI) has been increasing despite the price drop, signaling a clear divergence. OI nearly doubled from $1.46 million to $2.33 million over the past five days.
This surge in OI suggests that traders are favoring short positions over long ones and leveraging their positions accordingly.
Source: RIVER/USDT on TradingView
According to price action, the $7.72 level could act as a temporary support in the downtrend. Historical data on the 4-hour chart shows previous instances of bulls defending this level with a week-long consolidation.
This potential pause in the downtrend could pave the way for a rebound towards the resistance zone at $20.
The OI-Weighted Funding Rate is currently in the red at 0.0086%, as reported by CoinGlass, indicating that sellers are paying more to keep their short positions open, leading to increased long liquidations.
Long Liquidations Dominating River Crypto
Recent data from CoinGlass shows that long liquidations have been prevalent over the past four days. Currently, long liquidations amount to $564K, nearly double the $291K recorded for short positions.
Source: CoinGlass
These ongoing liquidations have triggered a long squeeze, intensifying the selling pressure on River. Concurrently, network activity has mirrored the price weakness, with fewer transactions occurring as prices continue to decline.
Weak Network Activity
Since the start of March, the transfer amount of River tokens has dropped from 18,631 to 8,413 tokens, while the transfer count has decreased from 962 to 460.
Source: Etherscan
While strong network activity doesn’t always translate to price strength, weak activity tends to exacerbate bearish conditions. In the case of River, the decline in network usage has contributed to the downward price trajectory.
Final Summary
- River crypto has experienced a 17% decline in 24 hours due to increasing long liquidations and weak network activity.
- The price action of River has invalidated bullish patterns and adhered to bearish patterns like the head-and-shoulder formation.
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