PYTH Token Loses 64% Rally in Bearish Retracement

The PYTH token, associated with the Pyth Network, experienced a significant price correction, wiping out a 64% rally that had occurred over the past week. The token's price surged from $0.128 to $0.211 between May 6 and May 9, marking a substantial gain. However, this rally was short-lived as the token faced a steep retracement, pulling back to its breakout base.

The On-Balance Volume (OBV) indicator, which measures buying and selling pressure, spiked during the rally but registered a new low during the retracement. Simultaneously, the Moving Average Convergence Divergence (MACD) formed a bearish crossover and was diving below the zero line, indicating a bearish trend. Despite the OBV attempting to recover, the overall trend appeared bearish.

From a market structure perspective, the drop below $0.135 in recent days was a bearish sign. This price level is crucial as it indicates a shift in market sentiment. A minor bounce followed by further losses is a possible scenario in the coming days, suggesting that the bears are not yet done with their downward pressure.

The 2-week Liquidation Heatmap highlighted the $0.137-$0.15 area as a magnetic zone, indicating a potential 10% price bounce within the week. However, this bounce alone would not shift the overall trend, which currently favors the bears. The bears have already erased the entire week’s gains, and momentum now favors them. A move beyond $0.16 would be the first sign of bulls winning this battle, but until then, traders should be cautious about going long.

The PYTH token's recent price action and technical indicators suggest that the bears are still in control. The token's price correction and the bearish signals from the OBV and MACD indicators indicate that the market sentiment is neutral to bearish. Traders should closely monitor the $0.137-$0.15 area for potential support and resistance levels, but the overall trend favors the bears. Until the price moves beyond $0.16, traders should be wary of going long and should consider the possibility of further price declines.