SEI Faces Critical Test as 193-Day Support Weakens After 37% Drop

• SEI formed a head and shoulders pattern that accelerated a double-digit decline.
• The support at $0.23 remains weak as the bullish momentum around it fades.
• SEI’s price risks dropping to $0.18 unless it sees an increase in buying pressure.

SEI, the native token of the modular layer-1 blockchain, has plunged 37% in the past month. Due to this drop, it now trades nearly 80% below its all-time high.

This decline made SEI one of the worst-performing top 100 cryptocurrencies last year. However, the interesting thing is that the trading volume around the token has increased by 55% in the last 24 hours.

The increase in trading volume has bumped SEI’s price by slightly by 3%. But despite the hike, the altcoin is unlikely to sustain the trend. Here is why

SEI’s Key Support Under Threat

SEI’s price action looks like a shadow of its 2024 Q1 performance. During that period, the cryptocurrency’s value rallied to an all-time high of $1.14.

By Aug. 4 of the same year, the price dropped to $0.23, which later supported SEI’s recovery to $0.70 last December. As of this writing, SEI trades near this 193-day support level.

But instead of bucking an uptrend like it did the last time, the token risks losing hold of the support line.

One reason SEI has experienced this downturn is the head-and-shoulders pattern formed on the daily chart. This pattern signals a bullish-to-bearish trend reversal.

It consists of three peaks: a lower peak (left shoulder), a higher peak (head), and another lower peak (shoulder). The daily chart shows SEI’s price has broken below the $0.34 neckline.

This caused the altcoin to decline to $0.26. Furthermore, while the price trades at $0.23, the Relative Strength Index (RSI) remains below the 50.00 midpoint, indicating that the momentum around SEI is neutral.

SEI Price Recovery to Breakdown?

Furthermore, CCN’s assessment of the 4-hour chart validates the thesis that the 193-day support is weak. This is due to the position of the Money Flow Index (MFI).

Recently, the MFI failed to decline below the signal line. However, the indicator’s reading still turned downward amid several failed attempts at sustaining an upswing.

This reversal indicates that SEI has been unable to sustain buying pressure. Therefore, holding the $0.23 support is unlikely.

If that is the case, SEI’s price might struggle to break above the $0.236 Fibonacci retracement at $0.26. Should that be the case, the next target for the altcoin could be around $0.19.

However, if the $0.23 support holds and buying pressure increases, this downturn might not happen. Instead, the value SEI could rise above the $0.30 resistance.

Once achieved, this could drive the cryptocurrency’s value toward $0.37. If the broader market conditions become highly bullish, this target could be higher, and SEI could trade at $0.42.