cryptocurrency Analysis firm Alphractal has issued a cautionary statement regarding REEF, a major altcoin that is up over 1,200% in just over 30 days.
While the rapid rise brought gains to early investors, Alphractal now warns that REEF’s risk has increased and a market correction may be imminent.
Alphractal highlighted several key risk factors in its analysis:
- Distance from Major Moving Averages: REEF is currently trading 200% above both its 200-day Moving Average (MA200) and its 100-day Moving Average (MA100). Alphractal emphasized that the further an asset moves away from these benchmarks, the more its risk increases, indicating a potential price correction.
- Long/Short Ratio: Historically, when REEF’s Long/Short Ratio became as negative as it is now, the altcoin has tended to reach price peaks. Alphractal suggests that market sentiment may soon change as traders return to long positions, which could impact current price dynamics.
- Derivative Volume/Market Cap Ratio: The ratio is currently 162%, indicating significant interest in leveraged transactions involving REEF. According to analysts, this ratio is a reliable measure of risk and indicates increased volatility and a potential pullback.
- Funding Rate and MACD: While REEF’s funding rate has turned positive again, the Moving Average Convergence Divergence (MACD) has entered negative territory, both signals that usually indicate a shift in market sentiment, according to the analysis firm.
- Given these indicators, Alphractal believes REEF may be entering a “retracement zone” as it seeks new buying demand.
*This is not investment advice.
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