Trading Activity Surges While SEI Price Drops Sharply— Are investors Turning Bearish on the SEI price rally?

SEI, the native token of the Sei blockchain, has recently witnessed a paradoxical market trend: surging trading activity alongside a sharp price drop. This divergence between on-chain growth and market valuation raises critical questions about investor sentiment and future price direction. While network usage increases and derivatives volumes soar, bearish momentum continues to weigh heavily on the token.

Active Address Surge While Price Drops

The SEI price has been closely watched in the past few days as the token was among the trending tokens throughout the last few days of June. As a result, the trading activity over the platform began to rise, which positively impacted the token’s value. However, the bears seem to have started to take profit and as a result, the price has remained bearish since the start of the month. 

The daily active address of SEI has peaked recently, which suggests strong trading activity on the platform. On the other hand, the SEI price has been dropping sharply and hence, this disconnect signals the speculative sentiment in the broader market remains bearish. However, the active addresses are expected to climb next week with the news of the Japanese Financial Services Agency (JFSA) approving the listing of SEI on Japanese exchanges. Therefore, the volatility is expected to climb high but it would be interesting to watch the impact on the price. 

SEI Price Prediction: Will it Rise Above $0.5?

The rising momentum of the SEI price had positively impacted the token, which had pushed the price above the 200-day MA. Besides, the Gaussian Channel had also turned bullish, hinting towards a change in the bearish trend. Meanwhile, after reaching the local peak above $0.3, the bears jumped into action as the volume dropped and reached its initial range, placing the price at a crucial juncture. The token is now testing the pivotal support at the 20-day MA and a drop below the range may not be healthy for the SEI price rally. 

The SEI price appears to be bullish in the daily chart as it is stuck within a bullish flag; however, the technicals do not point towards a breakout. Although the price is above the Ichimoku cloud, which could be a bullish indicator, the conversion line has displayed a bearish divergence, hinting towards the growing dominance of the bears. Additionally, the MACD shows a drop in the bullish pressure and this will be substantiated by the upcoming bearish crossover. 

Therefore, bearish clouds continue to hover over the Sei price rally, as a drop below the support zone between $0.2683 and $0.2517 could push the token close to $0.21. On the contrary, a rebound could elevate the levels above $0.4, which could open the gates for $0.5.