- SafeMoon price dipped below the May 23 swing low to form a new bottom at $0.00000257.
- A reversion to the mean indicates a 60% upswing.
- The RSI has dipped below the oversold zone, further strengthening the bounce-back narrative.
SafeMoon price has experienced a massive sell-off since June 15 as it deviated below its previous range low established on May 23. However, this deviation is likely to revert to the mean, providing an excellent opportunity for an uptrend.
SafeMoon price likely to revert to mean
SafeMoon price created a range as it dropped 60% from $0.00000682 to $0.00000257. Since this vast crash, SAFEMOON briefly reverted to the 50% Fibonacci retracement level of this range at $0.00000478.
The inability of the buyers kept SafeMoon price below this level for most of the time. Similar reversion to the mean takes place when a significant price move occurs, regardless of the direction.
The recent sell-off pushed the range low to $0.00000257. AlthoughSafeMoon price has risen 24% over the past 12 hours, more of this ascent is likely to occur shortly.
Therefore, investors can expect SAFEMOON to retest the 50% Fibonacci retracement level at $0.00000470, roughly a 60% rally from the support level at $0.00000295.
SAFEMOON/USDT 4-hour chart
RSI dips into oversold region
Moreover, crashing 30% between June 20 and June 22 pushed SafeMoon price to create a new range low and dragged the Relative Strength Indicator (RSI) below 30, the oversold level.
The last time RSI dipped below 30 was on May 23, which was followed by an 88% rally, which swaggered through the mean.
Although RSI has climbed to 46, if something similar were to happen, a 60% upswing to the 50% Fibonacci retracement level at $0.00000469 seems likely.
Bitcoin, general cryptocurrency market hints at move higher
The mean reversion theory holds for Bitcoin price as well. Considering the massive correlation that altcoins generally have with BTC, it is likely to assume that a swift move up in the flagship crypto’s market value will likely trigger the altcoins to do the same, including SAFEMOON.
This relation depends mostly on Bitcoin’s dominance, which measures how much of the total cryptocurrency market comprises BTC.
In a nutshell, it is the ratio of the market capitalization of Bitcoin to the altcoins. Generally, a decrease in Bitcoin dominance paves the way for altcoin season, and the opposite makes altcoins heavily correlated with BTC.
Over the past month, the dominance chart has set up two higher highs, indicating a steady growth and further adding credence to the bullish thesis for SAFEMOON.
After the recent sell-off, the flagship cryptocurrency has positioned itself for a move higher; therefore, investors can expect SafeMoon price to do the same as well.
BTC.D 1-day chart
To conclude, the technical perspective indicates that SafeMoon price is likely to head higher. However, the resistance levels at $0.00000338 and $0.00000412 will play a pivotal role in deciding if the rally reaches its intended target at $0.00000470.
Rejection at any of these levels leading to a decisive 4-hour candlestick close below the range low at $0.00000257 will invalidate the bullish thesis.
In this case, SAFEMOON might dip 23% to the immediate support level at $0.00000198.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.