Seeker [SKR] violently squeezed short positions with its 292% rally from $0.091 to $0.359 last weekend. Since making this swing high, the altcoin has faced selling pressure from profit-taking activity.
The native utility and governance token has witnessed negative Funding Rates in recent days. Extreme negative values and falling spot CVD signaled intense selling pressure on the 31st of August following the rally.
It reflected market conviction that the rally was about to end. The Open Interest has slumped from $42 million on Monday to $24.6 million at the time of writing. Market participants have taken profits and exited the derivatives market.
A retracement phase was underway. Here’s how low SKR prices can fall to and where buyers might re-enter.
Bullish breakout confirmed, but another 40% SKR dip possible
In the past 24 hours, Bitcoin [BTC] has shed 1.88%, falling from $78k to $76.6k. This minor correction toward the local $76k support zone helped explain why SKR faced losses in recent trading hours.
The bigger reason is that SKR was highly overextended after its rally towards the end of August.
The rally in question broke the previously bearish trend. The $0.10 swing high from early July was decisively breached. Seeker bulls didn’t give the others any time within a consolidation to accumulate the token.
Instead, they drove a price move to $0.36, the highest the altcoin’s price has reached since February.
The bullish swing structure was used to plot a set of Fibonacci retracement levels (yellow). The golden pocket between $0.0126 and $0.0175 is likely to be tested before another rally.
Traders’ call to action – Be cautiously bullish
Seeker is a relatively small-cap token that has made a remarkable rally. It was retracing swiftly, and the Coinalyze data from earlier showed short-term bearish conviction.
The 1-hour chart showed that the $0.024 former support zone has been flipped to resistance over the past 48 hours. The RSI was below neutral 50, and the OBV was rapidly sinking, highlighting bearish momentum and heavy selling.
A dip to the $0.0125-$0.0175 is likely to be met with a reaction from the buyers. However, if Bitcoin continues its descent, it could spook the market and possibly upset the uptrend SKR has established.
Final Summary
- Seeker faced sizeable profit-taking pressure after the weekend’s rally and was in a retracement phase.
- The current price dip could extend by another 40% if the price reached the 78.6% retracement level at $0.0125.
