Magic Eden (ME), the native token of NFT marketplace Magic Eden, has seen a 54% drop in price over the past 24 hours. The drop occurred on December 10, when ME completed a controversial airdrop of 125 million tokens.
Now, ME is trading at $4.99 and may continue to fall.
Airdrop-induced decline
On Tuesday, Magic Eden airdropped 125 million ME tokens, or 12.5% of its total supply. After the airdrop, the price of ME soared, reaching $30 on some exchanges.
However, due to the cumbersome claim process for the airdrop and technical issues, many users were frustrated, which led to a wave of selling and the price of ME plummeted 54% in 24 hours. ME is currently trading at $4.99.
BeinCrypto analyzed the 1-hour chart of ME/USD, showing that the market's bearish sentiment towards this token is heating up. From the perspective of the balance of power indicator, the current value is -0.70, which is below zero, indicating a stronger bearish sentiment.
The BOP indicator measures the power of buyers and sellers by analyzing price trends over a certain period of time. When the BOP is negative, it means that sellers are dominant, market sentiment is bearish, and asset prices may face downward pressure.
Additionally, the relative strength index (RSI) of ME also supports this bearish outlook. As of now, the RSI is 47.21, which is still in a downtrend.
The RSI indicator is used to measure whether an asset is overbought or oversold, with a value range of 0 to 100. When the RSI exceeds 70, it means that the asset may be overbought and may need to be adjusted.
An RSI below 30 usually means an asset is oversold and could be due for a rebound. Currently, ME’s RSI is 47.21, indicating that selling pressure is gradually increasing as bearish sentiment intensifies.
ME Price Prediction: Sell-off could cause the coin to fall to all-time lows
As of now, ME is trading at $4.99, which is slightly above its all-time low of $4.13. If ME holders continue to sell, the price could return to this support level. If the bulls fail to hold this support level, there is a possibility that the price of ME could fall below this support and move further lower.
However, if the demand for Magic Eden tokens picks up again, there is a chance that the price will rebound and move up to $9.66.
