In April and May, $SKYAI’s rally has been a strong momentum play for altcoin traders. The subsequent 84.68% retracement from $0.866 to $0.132 was a hefty pullback.
Within a month, most of the rally had been wiped out, giving the impression of a full-blown bear market compressed into a matter of weeks.
Yet, the $SKYAI long-term trend remained bullish. The price was still trading above the 200-day moving average at $0.1219 and, at press time, was challenging the 50-day moving average at $0.3308.
In a recent report, covered how short-term bullish strength vanished as the altcoin approached the $0.36 local resistance zone. An Open Interest flush was indeed met with another price decline toward the $0.15 support zone.
Accelerating profit-taking in the spot market also made a recovery difficult. Here’s a deep dive into the price action to understand what the next $SKYAI trend could be.
Short-term consolidation belies longer-term $SKYAI trend
Source:
$SKYAI on TradingView
Since the October crash forced a market bottom for the altcoin, it has steadily advanced higher. It finally beat the previous swing high at $0.08 (green) in April, and the bulls didn’t look back afterward.
From the 11th of April to the 6th of May, the token rallied by 1,102%. Despite the 84% retracement, its swing structure remains bullish. Even the 78.6% retracement level at $0.191 has been defended over the past two weeks.
The technical indicators reflected a bearish market state. For a month, the CMF has been well below -0.05 to indicate sizeable capital outflows. The MACD was also below the zero line at the time of writing.
Gauging the $SKYAI breakout chances
Source:
$SKYAI on TradingView
A range formation (purple) between $0.135 and $0.385 was in effect, as revealed by the 4-hour chart. At the time of writing, the token was advancing swiftly toward the highs.
The MACD and the CMF agreed on firm bullish momentum and sustained capital inflows. Therefore, a $SKYAI bullish breakout past $0.385-$0.400 appeared likely.
Source: CoinGlass
On the other hand, the liquidation heatmap outlined a large cluster of short liquidations from $0.39 to $0.44. It is possible that a bullish breakout into this magnetic zone would be met with rejection, which would catch out the buyers who entered the market following a range breakout.
It was a difficult scenario for $SKYAI, but overall, a bullish bias remained warranted. Buyer caution around the $0.40 supply zone is necessary, but if this area is flipped to support over the next week, it could offer a feasible buying opportunity.
Final Summary
- The $SKYAI profit-taking activity has not been enough to halt the latest price bounce back toward the range highs.
- The higher timeframe structure was bullish, but the $0.35-$0.40 supply zone posed a stern obstacle to the buyers.
