1INCH is a cryptocurrency not to buy now, analyst points out
The 1inch token (1INCH) faces a significant downtrend, with expectations of a decline after being rejected from a key resistance zone last Saturday.
Analyst Manish Chhetri, a crypto asset specialist, highlighted that “1INCH price was unable to overcome its descending trend line. Now, it is at risk of falling even further in the coming days.”
Digital asset 1INCH failed to close above the 200-day Exponential Moving Average (EMA) situated at $0.311. This is a key resistance level that has coincided with a downtrend line drawn since March.
After this rejection, the token fell 4.2% on Sunday. And, this Monday, it continues to decline, trading at around US$0.285, accumulating an additional loss of 4%.
Downside Predictions for 1INCH
Chhetri warned that if the 1INCH token closes below the $0.283 support, the decline could extend up to 18%. This could see the price retest the low of $0.233 recorded on September 18.
Additionally, the Relative Strength Index (RSI) also indicates weakening bullish momentum, with a reading of 53 on the daily chart. He points out that if the RSI falls below the neutral level of 50, it could signal a massive sell-off and further strengthen the downtrend.
The token's on-chain behavior further supports the downside prediction. Exchange Flow Balance, a metric that monitors the flow of tokens across exchanges, suggests that more 1INCH tokens are being sent to exchanges. This increases selling pressure.
“On September 24, this metric jumped from -407,910 to 44.01 million on September 25, indicating that investors are transferring large amounts of 1INCH to exchanges with the intention of selling them,” noted Chhetri.
Another indicator that reinforces the bearish forecast is the “Age Consumed” index, which tracks the movement of tokens that were inactive for a long period. According to Chhetri, spikes in this index often signal important changes in price.
The analyst also highlighted that historically, whenever dormant tokens start to move, as occurred on September 25, the price of 1INCH drops shortly thereafter.
These factors combined, both technical and on-chain, form a bearish outlook for the 1INCH token in the near term. However, Chhetri also pointed out that if 1INCH manages to close a daily candlestick above $0.322, it would invalidate the downside prediction. In this case, the token could experience a 9% rally, testing the next resistance at $0.351.