The price of ME, the token powering the Magic Eden NFT market, has dropped 54% in the past 24 hours. This decline occurred after the completion of a heavily criticized airdrop of 125 million tokens conducted on December 10.
As of the time of writing, ME is trading at $4.99 and is poised to extend this decline.
The Magic Eden token faces headwinds
On Tuesday, the Magic Eden NFT market conducted an airdrop of 125 million ME tokens, accounting for 12.5% of the total supply of 1 billion. After the airdrop, the value of ME surged immediately, reaching $30 on certain exchanges.
However, the compensation request process is complex and technical issues have left many users frustrated, leading to a sell-off that caused the value of ME to drop 54% in just 24 hours. As of this writing, ME is trading at $4.99.
BeinCrypto's assessment of the ME/USD chart over one hour confirms an increase in bearish sentiment towards the altcoin. This is reflected by its Power Balance indicator, which has a value below 0 at -0.70 at the time of publication.
ME Power Balance. Source: TradingView
The BOP indicator measures the strength of buyers versus sellers by analyzing price fluctuations over a certain period. When the BOP of an asset is negative, sellers dominate, indicating bearish market sentiment or selling pressure on the asset.
Additionally, the relative strength index of ME confirms this bearish outlook. At the time of writing, this figure is at 47.21 and is still in a downward trend.
The RSI indicator measures the overbought and oversold market conditions of an asset. It ranges from 0 to 100, with values above 70 indicating that the asset is overbought and due for a correction.
ME relative strength index. Source: TradingView
On the other hand, values below 30 indicate that the asset is oversold and may witness a recovery. The RSI of 47.21 confirms increasing selling pressure as bearish sentiment rises.
ME Price Prediction: Sell-off puts the token at risk of dropping to all-time lows
At the time of writing, ME is trading at $4.99, slightly above the all-time low of $4.13. If ME holders continue to sell off, the price will plunge to this support level and may break below it if the bulls fail to defend it.
ME price analysis. Source: TradingView
However, if the demand for the Magic Eden token increases again, its price may adjust and rise to $9.66.