SEI's Critical Juncture: Can Support Reclamation and Derivatives Activity Signal a Strategic Entry Point?

The Sei Network (SEI) has long been a polarizing asset in the crypto market, oscillating between speculative fervor and bearish consolidation. As of late 2025, the token finds itself at a pivotal inflection point, with on-chain metrics and derivatives activity painting a nuanced picture of potential reversal. While the price remains compressed below key moving averages, the interplay between robust decentralized exchange (DEX) volume, surging derivatives positioning, and technical indicators like TD Sequential suggests a possible turning point. This analysis examines whether SEI's current dynamics-particularly its reclamation of support levels and derivatives activity-justify a strategic entry for investors navigating a bearish trend.

On-Chain Divergence: Accumulation Amidst Price Compression

Despite SEI's price languishing near $0.12–$0.14, on-chain data reveals a stark divergence. DEX volume on the Sei Network has surged to over $400 million in just two weeks, reflecting sustained user participation at lower price levels. This divergence-where price stagnation contrasts with rising on-chain activity-is a classic sign of accumulation, particularly when occurring near long-term support zones according to analysis.

Moreover, SEI's efficiency in total value locked (TVL) underscores its unique position in the DeFi landscape. With $600 million in TVL and $38 billion in perpetual trading volume, the network generates 16 times more trading volume per $1 TVL than the average DeFi competitor. This efficiency, combined with a TD Sequential buy signal near the $0.19 support zone, hints at a potential bullish reversal. If SEI breaks above $0.20, it could target a broader upside move toward $1.50, assuming momentum sustains.

Derivatives Activity: A Double-Edged Sword

Derivatives markets have become a critical barometer for SEI's trajectory. Over the past 90 days, perpetual contract trading volume for SEI has skyrocketed by 19,527%, while a 4.7-fold increase in derivatives volume in under a week highlights aggressive positioning. These figures suggest traders are preparing for future price appreciation rather than reacting to current conditions-a bullish signal in itself.

However, open interest (OI) trends tell a more cautious story. After a short-term price rebound, OI expanded rapidly but has since drifted lower alongside softening prices, indicating that leveraged positions are being closed. Futures volume has risen by 41% to $125 million, but OI has declined by 3.3% to $100 million, reflecting short-term trading activity without long-term conviction. This dynamic points to a market in consolidation, where bearish control-evidenced by lower highs and lower lows-remains intact according to market analysis.

Price Action and Technical Indicators: A Battle for $0.14

SEI's price action at the $0.12–$0.14 support level is emblematic of a market in indecision. Daily average true range (ATR) has compressed to around one cent, with the 20-day EMA acting as a short-term support. While the price clings to this level, it remains well below the 50-day and 200-day EMAs, confirming a broader bearish trend.

Technical indicators like the MACD and Chaikin Money Flow further underscore weak bearish momentum, with negative capital flows dominating. Yet, TD Sequential buy signals on higher timeframes-particularly bi-monthly and weekly charts-suggest a potential reversal if the price holds within the $0.1527–$0.1653 support range according to technical analysis. A decisive close above $0.14 could trigger a move toward $0.17, with a long-term target of $0.58 if a double bottom pattern completes according to market forecasts. Conversely, a breakdown below $0.12 could expose deeper support levels at $0.09–$0.10, especially with a $7 million token unlock scheduled for December 15, which may exacerbate selling pressure.

Strategic Entry Point: Weighing the Risks and Rewards

The interplay between on-chain and derivatives data presents a compelling case for a strategic entry, albeit with caution. The surge in DEX volume and TVL efficiency indicates strong fundamentals, while TD Sequential signals and derivatives positioning suggest speculative optimism. However, the bearish bias in open interest and price action-coupled with the looming token unlock-cannot be ignored.

For investors, the key lies in timing and risk management. A breakout above $0.14, confirmed by RSI and MACD divergence, could validate the bullish case, but a breakdown below $0.12 would likely reignite the downtrend. Given the current risk-off environment and macro-driven crypto market dynamics, SEI's fundamentals may struggle to gain traction unless broader market conditions improve.

Conclusion

SEI's critical juncture is defined by a tug-of-war between on-chain strength and bearish price action. While derivatives activity and TVL efficiency signal potential for a reversal, the market's consolidation and open interest trends highlight lingering caution. For those willing to take a calculated risk, a strategic entry near $0.14-backed by a TD Sequential buy signal and rising DEX volume-could offer asymmetric upside. However, the looming token unlock and macro risks necessitate a disciplined approach, with tight stop-losses and a focus on confirming breakout signals.