Examining REEF crypto’s 80% decline in 24 hours – How, why, and what next?

REEF crypto fell by 80% in 48 hours
Is a rebound likely as weighted sentiment hits a monthly high?

As a seasoned crypto investor with a knack for navigating through the stormy seas of the digital asset market, I’ve learned to be both patient and adaptable. The recent 80% plunge of REEF in just 48 hours has left me with a familiar mix of apprehension and excitement.

Over the course of two days, the value of REEF cryptocurrency, which is tied to the Reef chain, experienced a significant 80% decrease from its mid-week levels. This drop caused concern among investors, particularly those who had only recently purchased the token as it fell from $0.01 down to $0.002.

Examining REEF crypto’s 80% decline in 24 hours – How, why, and what next?

In simpler terms, a significant drop in REEF’s price was primarily due to heavy use of leverage. The number of open contracts (Open Interest) increased by an impressive 8.7 billion, indicating that many traders took on more leveraged short positions. This surge in short selling pushed the price of REEF even lower on the charts, suggesting that these speculators were betting against REEF.

Speaking of which, REEF has experienced an astonishing comeback since last September, skyrocketing a staggering 1500% following its removal from Binance‘s spot trading in August. Given this impressive performance, let’s examine what insights the data provides about its future prospects.

REEF’s sentiment hits monthly high

Examining REEF crypto’s 80% decline in 24 hours – How, why, and what next?

Currently, REEF’s Weighted Sentiment has turned around and reached a new peak this month. This indicates that speculators are optimistic about the token’s future growth prospects following its recent decline. In other words, there might be a possible change in the token’s price trend.

Nevertheless, there remained pressure on supply within the exchanges. Interestingly, Santiment’s data indicated a surge in supply on these platforms, suggesting that a substantial amount of REEF tokens had been transferred to centralized exchanges for selling purposes, presumably during the market downturn.

Furthermore, external trading activity decreased – Indicating a less robust accumulation pattern for the token. With reduced demand and increased supply pressure, there was little evidence of a significant price recovery for REEF, as of the current reporting period.

Examining REEF crypto’s 80% decline in 24 hours – How, why, and what next?

On the Binance exchange, it was noticeable that short-term selling pressure from ‘smart money’ was prevalent. As per the Long/Short position ratio by top traders, about 51% of their positions were betting against the asset.

In simpler terms, even though the overall market feeling is becoming more positive, traders remain cautious about a significant recovery due to their current investment strategies.

2024-10-17 07:03

REEF’s sentiment hits monthly high

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