Can WAVES turn tide in favor of bulls after recent bearish pressure

WAVES just concluded its first two weeks of June on a downward trajectory that saw it push back to May lows. This is despite the little upside towards the end of May, which made it seem as if the bulls were back in control.

The end of May rally pushed WAVES out of its narrow range where it traded for most of the month. It peaked at $11.60 on 1 June but it has since dropped more than 60%. The token stood at $4.21 at press time, which puts it within the same price range as its May lows. This means that WAVES retested support at its trading price during press time.

Buying pressure?

The support retest means WAVES can potentially yield some accumulation. Buying pressure at the prevailing price point may result in a price uptick.

Furthermore, its price just entered the oversold territory, hence increasing the likelihood of accumulation at current levels. This, in turn, means a higher probability of a bounce-back from the support retest.

Source: TradingView

WAVES Relative Strength Index (RSI) hovered at 29.55 at press time after the bearish performance in the last two weeks. However, the Money Flow Index (MFI) dropped from the overbought zone and hovered just above the 50% level. This means its sell-off is not as severe and the selling volume is low. The Directional Movement Index (DMI) also confirms this with low directional momentum.

The on-chain side of things reveals a significant drop in its market cap, back to end-of-May levels. Its supply held by whales has also gone down significantly in the last two weeks, from 46.98 to 45.43%. It, however, registered a slight uptick in the 24 hours leading up to this press. This is a slight but significant sign of accumulation at recent lows.

Source: Santiment

WAVES also maintained healthy daily NFT volumes in the last two weeks despite the price of the token dropping by half. It registered its lowest daily volumes at $14.91 million on 11 June. Meanwhile, its Binance funding rate improved in the last few days, suggesting improving demand from the derivatives market.

Source: Santiment

WAVES’ selling pressure notably reduced near the support level. An uptick would be expected if significant accumulation takes place near the current level. WAVES bulls are also at the mercy of the prevailing crypto market sentiment. There is still significant probability of more downside if the FUD and selling pressure extends into the weekend.