- Safemoon price has been in a strong bearish trend lately.
- The coin has formed a descending broadening wedge pattern.
The Safemoon price has been in a downward trend as the cryptocurrency sell-off gains steam. The SFM token is trading at 0.00045 USDT, which is slightly above the weekend low of 0.00040 USDT. It has retreated by 65% from its highest point in April, bringing its market cap to $290 million.
Safemoon sell-off gainst steam
There are two main reasons why investing in Safemoon has been in a strong downward trend in the past few weeks. First, the SFM sell-off mirrors that of other cryptocurrencies and stocks.
Most digital coins have been in a strong downward trend recently because of the rising inflation and the fact that Fed officials are open to more tightening. This also explains why cryptocurrencies like Bitcoin and Ethereum have dropped by double digits. In total, the market cap of all digital coins has declined from an all-time high of over $3 trillion to $1.6 trillion.
Other assets have also performed poorly in the past few weeks and Safemoon has not been an exception. For example, the Nasdaq 100 index has declined by more than 24% from its highest point this year signaling that the tech bubble has burst.
Further, a bond sell-off has happened in the market. In the United States, the 10-year and 30-year bond yields have all moved above 3%. Bond yields typically move inversely to prices.
Second, the Safemoon price has declined because of the ongoing legal challenges that were launched by CoffeeZilla. There have been allegations of fraud against the company’s CEO, John Karony. While the Safemoon community has rejected the multitude of accusations, it seems like most people have decided to sell their stakes.
Safemoon price prediction
The four-hour chart shows that the Safemoon price has been in a strong bearish trend in the past few months. Along the way, the coin has formed a broadening wedge pattern, which is usually a bullish wedge pattern. In price action analysis, this pattern is usually a bullish sign.
At the same time, the bearish trend has been supported by the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved slightly above the neutral level.
Therefore, in the near term, the bearish trend will likely continue as sentiment wanes. It will then bounce back in the coming months.
How to buy SafeMoon in 2022
As more people look to alternative cryptocurrencies, SafeMoon has become an interesting proposition for many crypto enthusiasts. The coin is coming towards the end of its first year in existence, with its value looking like it’ll finish in the green. If you are interested, take a look at our guide on how to buy SafeMoon.
