Sei price action forecasts an opportunity to accumulate SEI

Sei (SEI) price is at a crossroads and could trigger a steep correction or potential bounce after setting up an all-time high (ATH) of $1.145 roughly a month ago. Based on the Bitcoin price action, a potential bounce will likely occur anytime now. If such a development occurs, SEI and other altcoins could disregard the signals and climb higher. 

Also read: Sei Price Prediction: SEI is in the zone of interest after a 10% leap

Understanding Sei price action

Sei price’s technicals suggest a potential correction in the works. To understand this, investors must note that an uptrend consists of higher highs and higher lows. A downtrend is made up of lower highs and lower lows. When the bullish momentum is exhausted, and the underlying asset is transitioning from being a bull market to a bear market, there are a few signs.

1. The underlying asset produces a sell signal where the momentum indicators are declining, but the asset continues to rally.
2. This phase usually consists of a rangebound movement, which is eventually breached.
3. The third step involves the underlying asset producing a lower low, which is the first sign of bulls’ failure to defend the price. Following this, the asset produces a lower high, which showcases bulls’ inability or bears’ rising dominance. Here, profit-taking is wild and retail investors typically tend to buy the sell orders of smart money, who are cashing out.
4. The fourth phase includes a reversal and the start of a downtrend or a bear market. 

Sei price has shown all of these signs, including the bearish divergence between the underlying asset producing higher highs and the momentum indicators producing lower highs. The most recent price action for SEI has set up a lower low below the key swing low of $0.562 and a lower high below ATH of $1.145, signaling a potential reversal or the start of a bear market. Considering the current state of Bitcoin price, a bear market is unlikely. Therefore, altcoins’ recent 50-70% corrections are short-term profit-taking after months of up-only movement. 

Going forward, investors must observe Sei price’s three-day candlestick closes around $0.562.  A decisive move above this level will confirm a resurgence of bulls, which should be backed by an optimistic development in Bitcoin price as well for a higher chance of success. This move will likely be followed by a near-45% rally to $0.803, which is the midpoint of the $0.562 to $1.045 range.

SEI/USDT 3-day chart

Buying the dips 

The aforementioned bullish scenario for Sei price will need investors to buy the dip around $0.562. However, a bearish outlook will likely unfold if Bitcoin price fails to recover here. Such a development will include a breakdown of $0.562 followed by a steep 45% correction into the $0.306 support level.  Sidelined buyers looking for an opportunity to accumulate SEI could purchase the dips between $0.265 and $0.350, which is the weekly imbalance. 

Ideally, long-term investors should consider accumulating SEI between $0.215 and $0.306 support levels.