Sei Price at Risk of a Crash as Transactions Plunge

Sei price is stuck in a bear market after plunging by over 25% from its highest level this year. This retreat will likely continue in the coming weeks as it has formed a descending triangle pattern. Also, its fundamentals have deteriorated, with the number of transactions being in a strong downtrend.

Sei Price Could Crash as Descending Triangle Forms

The daily timeframe chart shows that the Sei price peaked at $0.3891 in July as the number of transactions in the network soared. Recently, however, the token has remained under substantial pressure and is at risk of further downside.

Sei Coin has moved below the 50-day Exponential Moving Average (EMA) and the strong pivot reverse point of the Murrey Math Lines tool.

Most importantly, Sei has formed a descending triangle pattern, which is a popular bearish continuation pattern. The pattern is made up of a descending trendline and a horizontal support level at $0.2652. It has failed to move below that support level several times since August 2nd this year.

Therefore, the likely scenario is that the coin will ultimately have a strong bearish breakdown in the coming weeks.

The profit target in a descending triangle is calculated by first measuring the distance between the widest point and then measuring the same distance from the lower side of the triangle.

In this case, the widest point is about 31% and measuring the same one from the lower side of gives the target price at $0.1800, which coincides with the oversold level of the Murrey Math Lines tool.

The bearish outlook of the Sei price will become invalid if it moves above the upper side of the descending trendline.

Sei Fundamentals are Deteriorating

One potential reason why the Sei price is about to crash is that its fundamentals have continued to deteriorate in the past few weeks.

For example, data compiled by Nansen shows that the number of users, transactions, and fees in the network has deteriorated.

Sei Network handled 59.3 million transactions in the last 30 days, 60% decline, and a sign that it is losing momentum. This decline made it one of the worst-performing layer-1 chains in the industry.

The number of active addresses on the Sei network also declined during the same period. It had 13.65 million users, a 22% monthly decline. This plunge is notable as Sei was one of the fastest-growing networks in the crypto industry.

Sei Network also had more slowdown in other areas. For example, the amount of stablecoins in the network dropped by 10% in this period to $155 million. This decline was notable as the stablecoin industry is accelerating after the GENIUS Act became law in the United States.

According to Artemis, the number of stablecoin transactions dropped by 14% in the last 30 days to 6.6 million, while the adjusted transaction volume fell by 65% to $14.5 billion.

Sei Network gained popularity for its dominance in the gaming industry. While its market share remains, there are signs that the number of unique active users is falling. It had 13.76 million users in the last 30 days, a 17% decrease from the same period.

Sei Demand is Falling

There are indications that demand for the Sei Network token is declining. Data compiled by CoinGlass shows that the daily volume has been in a strong downward trend since June.

The daily volume peaked at $2.3 billion this year and has now fallen to below $300 million. A falling volume in the spot market is a sign that a cryptocurrency is not experiencing robust demand.

Unfortunately, the same trend is occurring in the futures market, where the futures open interest has continued to fall this month. The interest peaked at $380 million in July and has now tumbled to $254 million.