Key Takeaways
1inch has a bearish market structure and downward momentum. While the sellers seemed to have the upper hand, the price might have made a local bottom and could be preparing for a rebound.
1inch [1INCH] saw a 40.7% price retracement from 13 July to 2 August. This took 1INCH from the $0.391 swing high to the $0.232 swing low.
However, the higher timeframe market structure has remained bullish, despite the price dip.
Source: 1INCH/USDT on TradingView
Encouragingly for long-term investors, the retracement has led 1inch token prices back to the level that had been a resistance in May. The retest of the $0.24-zone as support in recent days is a positive sign for investors and may be a good buying opportunity.
However, the technical indicators, which are lagging by nature, did not agree. The CMF was at -0.26, reflecting the intense selling pressure on 1INCH over the past two weeks. The A/D line has remained flat over the past ten days, disagreeing with the CMF and showing that selling pressure was subdued.
The MACD agreed with the bearish market structure and highlighted strong downward momentum. The indicators examined did not signal a trend reversal, but the price action gave clues of one. Now, what do the on-chain metrics reveal?
Muted sentiment and steady accumulation show 1inch bullishness
Source: Santiment
AMBCrypto found that the weighted sentiment was negative, and has been for most of the second half of July. The funding rate dipped briefly into negative territory on 3 August, but it soon recovered. The falling Open Interest also underlined bearish sentiment in the derivatives market.
Together, they revealed that social media engagement was bearish and speculative traders were happy to stay out of the market. This, by itself, does not justify buying. The addition of the mean coin age changes the picture though.
The mean coin age fell off a cliff from late June to mid-July. This signaled heavy on-chain token movement and profit-taking activity. Over the past two weeks, the mean coin age has been trending higher, reflecting network-wide accumulation.
The chances of a bullish reversal increase when combined with the retest of the key horizontal level at $0.24. Investors must hope that Bitcoin [BTC] formed a local bottom at $112k over the weekend.
