CELO Faces Bearish Outlook as Price Drops 7.06% Amid Weakening Network Activity; Is This a Trap or Buying Opportunity?

Today, Celo (CELO) witnessed a 7.06% drop over the past 24 hours, a noticeable fall that made the cryptocurrency erase recent gains, according to a revelation disclosed by the market analyst PumpDumpAlert.

Celo (CELO) is a native PoS (proof-of-stake) token powering Celo, an Ethereum-compatible Layer-2 blockchain network designed to drive fast, low-cost payments, native stablecoins, and DeFi applications.

With the price decline noticed today, CELO currently trades at $0.07769. Its price has also been down 6.4% over the past week, meaning the asset is now underperforming the wider crypto market, which has been up 1.20% over the past week, according to data from CoinGecko.

Celo Heads For 40.8% Plunge

Celo is currently displaying a bearish outlook, as pointed out by a pennant formation on its weekly timeframe. Coupled with this bearish setup (as indicated in the technical analysis), Celo’s network activity is on a decline. The interplay and presence of these two metrics signal a continuation of CELO’s downturn movement, indicating that the asset’s price is set to further drop to $0.046.  

Technical analysis shows that maintaining the $0.059 support level is essential in invalidating the pennant. However, CELO’s falling network activity creates a potential downward pressure on CELO’s price. With the pattern formation, if the price drops below the lower trend line at the $0.059 support zone, the fall will lead to a further price decline, targeting $0.046, a 40.8% decrease from the current price.

HNT, RPL, QIE, and ATOM Lead in POS Sector Market Rally

CELO’s price fall is not a cause for panic; it suggests increased selling pressure in the market and indirectly indicates a buying opportunity for savvy investors seeking to position themselves for a potential uptrend in the market.

The drop is part of the wider cooldown momentum currently being noticed in the wider cryptocurrency market and especially in the PoS sector. However, some of the PoS coins leading with top market-sector surge include Helium (HNT), Rocket Pool (RPL), QIE Blockchain (QIE), and Cosmos Hub (ATOM), which have been up 85.4%, 52.2%, 16.3%, and 15.4% over the past week, respectively (according to metrics from CoinGecko), showing their innovativeness and increased popularity.