Raydium (RAY) has been facing a tough period. It fell out of the top 100 cryptocurrencies and its market cap has collapsed from over $2 billion to just under $500 million. The coin is currently trading at $1.61, marking a massive drop of over 71% in the past month alone. While the broader market has also experienced volatility, RAY’s decline has been particularly sharp.
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Why Raydium Is Dropping?
A key reason behind this is the recent discovery that Pump.fun, a Solana-based project, has been testing its own automated market maker (AMM). Since Raydium has been providing AMM liquidity for Pump.fun, this revelation led to a sudden drop in confidence, causing a steep selloff.
Additionally, interest in the Pump.fun platform has declined noticeably over the past week, which is likely also contributing to Raydium’s continued downturn.
Momentum Indicators
RSI: Oversold
The Relative Strength Index (RSI) helps gauge whether an asset is overbought or oversold. Currently, RSI(14) is at 31, placing RAY in oversold territory. While this suggests that the recent selloff may be overextended, it does not guarantee an immediate reversal – especially since RSI has remained near this level for weeks. The short-term RSI(7) is 33, indicating that selling pressure persists.
MFI: Oversold
The Money Flow Index (MFI), which incorporates volume into its calculation, is sitting at 22, down from 41 yesterday. This confirms that capital outflows are still outweighing inflows, further reinforcing bearish sentiment.
Fear & Greed Index: Fear
The broader crypto market sentiment, as measured by the Fear & Greed Index, is at 30, which leans towards fear. While this index doesn’t directly measure RAY, it reflects the overall market’s cautious mood.
Moving Averages
SMA & EMA: Bearish
Moving averages help identify trends. RAY’s SMA(9) is 1.63, slightly below its EMA(9) of 1.72, both of which are well below longer-term levels like SMA(26) at 2.49 and EMA(26) at 2.53. This suggests that short-term momentum remains negative, and RAY would need to reclaim these levels to signal any recovery.
Bollinger Bands: Increased Volatility
Bollinger Bands measure price volatility and breakout potential. Currently, RAY’s upper band is 2.79, while the lower band is 1.23. The price sitting near the lower band indicates possible oversold conditions, but it also shows that volatility has expanded, meaning further downside remains a possibility.
Trend & Volatility Indicators
ADX: Strong Downtrend
The Average Directional Index (ADX) measures trend strength. ADX(14) is at 40, which is relatively high, confirming that the current downtrend is strong. This suggests that the selloff might not be over yet.
ATR: High Volatility
The Average True Range (ATR) measures market volatility. Currently, ATR(14) is 0.38, showing that RAY is experiencing significant price swings. This could mean both opportunities and risks for traders.
AO: Bearish
The Awesome Oscillator (AO) helps confirm trend momentum. AO is -1.56, indicating that bearish momentum remains dominant.
VWAP: Bearish
The Volume-Weighted Average Price (VWAP) is at 4.54, much higher than the current price. This suggests that RAY has been consistently trading below its weighted average, a negative sign for bullish traders.
Relative Performance
Comparison Against SOL: Underperforming
The RAY/SOL ratio is currently 0.0127, having declined by 3.84% in the past 7 days and over 53% in the last 30 days. This indicates that RAY is underperforming Solana significantly, further confirming its weak market position.
Conclusion
Raydium’s technical indicators paint a bearish picture. The RSI and MFI might suggest oversold conditions, but the ADX and AO show that the downtrend is still strong. Moving averages remain bearish, and the expanding Bollinger Bands indicate heightened volatility. While a short-term bounce is possible due to overselling, RAY would need a sustained recovery in volume and a break above key resistance levels to signal any real turnaround.
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