ChainOpera AI drops 31% – Why COAI faces a KEY test ahead

Key Takeaways

Why is COAI’s sentiment bearish?

ChainOpera AI’s price crashed more than 31% in the past 24 hours amid a capital rotation to bigger AI tokens like TAO.

Will COAI rebound?

A rebound was dependent on the ability to hold above $4 and break previous resistance levels.

ChainOpera AI [COAI] has been among the top-performing crypto tokens in October.

Despite its explosive rise, COAI remained one of the most bearish tokens in terms of crowd sentiment.

According to CryptoRank, COAI surged over 1848% in Q4, largely driven by gains in October alone. However, in the last 24 hours, it topped CoinMarketCap’s trending tokens, leading with a sharp 31% loss, as of writing.

What’s driving bearish sentiment?

According to Market Prophit data, COAI led bearish sentiment among retail investors but did not show the same trend among institutional investors.

The 31% crash in a single day, despite attempts to stabilize at $4, drove this bearishness. The small rise in daily volume trading by about 5% indicated limited involvement by the big players.

Additionally, the rise in capitalization among the top caps in this sector denoted rotation from this new narrative coin.

At press time, Bittensor [TAO] led with 10% gains on the day, while its fellow big caps like Near Protocol [NEAR] and Internet Protocol [ICP] only registered weekly gains.

AI agents like Virtual Protocol [VIRTUAL] also surged by more than 61% this week, further drawing capital from this October outperformer.

Will history repeat?

COAI has been stabilizing above the $4 mark after testing this level for the third time. Historically, this support zone has sparked price surges above $20, with peaks approaching $30.

From a technical standpoint, the altcoin seems to be consolidating within a range of $4 to $26. The bullish outlook remains, supported by a potential MACD crossover and fading selling momentum.

Source: TrandingView

Additionally, the momentum indicator had recovered from negative 13 to minus 2, at press time. This showed bulls were slowly taking control, but there was yet to be a complete structure shift.

In case history repeated, COAI could revisit the $25 zone with $20 as a reasonable target. On the flip side, a break below $4 would invalidate this bullish anticipation, leading the price to around $1.82.

Where are the orders at?

While the ultimate target was around $20 to $25, as per the price structure, the liquidation heatmap indicated the short-term targets.

The $5 and $6 levels had the most concentrated liquidity, which could trigger an upward move. These high liquidity clusters set them as the next close targets.

Other orders were located at $4, which suggested that traders were buying at this level. However, the trading volume at this level was lower than that of the orders positioned above the current prices of COAI.

Source: CoinGlass

In conclusion, COAI was eyeing $5 and $6 as the next close targets if bullish sentiment took over, and ultimately $20+.

Caution was advised as the crypto was bearish. However, great entries emerge from such deep declines.