Celestia [TIA] crashes 15%, but can THIS ignite a reversal?

Celestia crashed more than 15% in the past 24 hours, only second to Zcash [ZEC], which declined by 18%, as per CoinMarketCap. TIA’s crash was three times that of the broader crypto market, which lost 5% of its capitalization.

The daily volume also declined by 15%, about $136 million when writing. Will Celestia [TIA] continue declining, and why was the altcoin down apart from the entire crypto market crash?

TIA price action 

As per the price action chart, TIA broke down below a critical sideways consolidation that had lasted about 10 days. Celestia’s price crashed past the support level at $0.60 but seemed to be building a floor at $0.56.

The clear market structure break confirmed the continuation of bear strength on the hourly chart. This followed the rejection of attempts of a reversal after the formation of a potential floor at $0.56.

The Chaikin Money Flow (CMF) was at negative 0.35. Capital outflow was increasing, extending from the 27th of November, when inflows stopped.

Source: TradingView

However, the MACD hinted at another outcome even though bears were breaking lower and lower.

The reading showed seller dominance, but the momentum was decreasing, which meant a reversal could not be ruled out. More analysis suggested this could not be further from the truth.

Liquidity clusters suggest upside potential 

The liquidity clusters were building to the upside each time Celestia broke below its previous levels on the daily heatmap chart.

Price follows liquidity, and for sure, there was enough of it in levels above $0.60. The zone was the support level that held the price for almost a fortnight.

The most concentrated liquidity cluster was at $0.70 and still the furthest from the price for the short-term data.

Other notable zones were $0.63 and $0.66, which could hinder appreciation, as some traders would look to take profit at these levels. However, the reaction was dependent on the type of orders present.

Source: CoinGlass

Still, since liquidity is dynamic, there was some building below $0.57. However, it was not significant enough to influence a further drop, but the wider market weakness could.

Liquidity clusters could ignite a reversal in this market. In the same way, the liquidity forming could be sell orders in buildup, which could influence further drops.

Why is TIA down today?

Lastly, the recent Matcha upgrade on the 24th of November was not enough to steer chain activity. Instead, users have continued to shy away from crypto and, in particular, altcoins as BTC.D traded back to 58%.

The number of active addresses reflected this weak activity, as they dropped to a new low of 36,100 per month.

Source: Token Terminal

Furthermore, investors were fleeing risk-on assets after the overnight market crash.

Final Thoughts

• Celestia crashes 15% due to a market structure break, weak activity, and broader market fragility. 
• The liquidity clusters forming above the price could ignite a reversal or fuel a further drop, depending on the type of orders.