BEAM is retracing after days of a strong upswing. After Binance was hacked three days ago, the attacker stole 984 million BEAM.
In response, the team made a completely unexpected move, burning all the stolen funds while they sat in the attacker’s wallet. As such, the attacker never got to sell these tokens.
This token burn reduced supply, increased scarcity, and resulted in a price pump. As a result, BEAM climbed to a high of $0.0063. Since then, however, this momentum has faded, and the altcoin has retraced.
In doing so, BEAM breached $0.006 and fell below $0.005, touching a low of $0.0048. As of this writing, BEAM was trading around $0.0049, down 15% on the daily charts.
BEAM plunges as sentiment flips bearish
BEAM’s rally was mainly driven by supply shock. Historically, such upside moves have been short-lived, and the current rally was no different.
Investors who chased this rally have since turned bearish and begun exiting their positions. On the Spot side, sell volume exceeded buy volume for the first time in four days, rising to 508 million while sell volume fell to 459 million.
As a result, the Spot Buy/Sell delta turned negative, falling to -48 million, a clear sign of aggressive Spot selling.
On the derivatives side, investors were even more bearish. According to CoinGlass data, Open Interest plunged 25% to $14.4 million, while the derivatives volume fell 22% to $75 million.
Falling OI alongside the volume suggested reduced market participation while traders closed their positions. This suggested a shift in sentiment toward risk-off.
Often, when sellers dominate both the Spot and derivative markets, market conditions weaken, leading to a price decline.
Is the altcoin set for more losses?
BEAM plunged as speculative demand, driven by the recent token burn, faded. As a result, the upside momentum has weakened while the downside pressure has strengthened.
A look at the Relative Strength Index RSI confirms this view. The RSI fell from overbought to 68. The falling RSI suggests weakening buying pressure as sellers retake the market.
However, they are yet to retake it fully. If the selling pressure continues, RSI will drop towards 50, confirming this bearish takeover.
In doing so, BEAM will likely drop to $0.0033. To invalidate this bearish outlook, the altcoin needs to reclaim $0.005 and see a close above $0.0057.
Final Summary
- BEAM plunged 15%, breached the $0.005 support level, and fell to a low of $0.0048.
- BEAM declined as momentum from the previous token burn faded, and sentiment flipped bearish.
