SEI's Imminent Breakout and Short Squeeze Potential: A Technical and Liquidity-Driven Analysis

The cryptocurrency market has long been a theater of volatility, but few tokens have captured the attention of traders and analysts as intensely as Sei Network (SEI). With a confluence of technical indicators, liquidity dynamics, and speculative positioning aligning, the stage is set for a potential breakout and short squeeze. This analysis delves into the mechanics of SEI's momentum, short interest, and market structure to assess its trajectory in late 2025.

Technical Momentum: Chart Patterns and Indicator Signals

SEI's price action has formed a symmetrical triangle and a W-pattern, both of which are classic bullish reversal signals, according to an OKX analysis. These patterns suggest a critical juncture: a breakout above the $0.35 resistance level could trigger a cascade of buying pressure. Key support levels at $0.28–$0.30 and $0.345 have held firm, while resistance at $0.35, $0.37, and $0.50 represents psychological barriers that traders are closely monitoring, according to the OKX analysis.

Technical indicators provide mixed but actionable insights. The Relative Strength Index (RSI) has oscillated between overbought and oversold levels, currently stabilizing at 39.33-a sign of potential exhaustion in the bearish trend, according to CoinCentral. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram has turned slightly positive, indicating a narrowing gap between bearish and bullish momentum; CoinCentral also highlights this shift. Fibonacci retracement levels further reinforce this narrative: the 38.2% retracement aligns with $0.35, while the 61.8% level projects a target of $0.50, per the OKX analysis.

Short Squeeze Potential: Derivatives Exposure and Open Interest

While short interest data for the crypto variant of SEI is less transparent than for equities, derivatives markets reveal a high concentration of leveraged short positions. On Bitget alone, over $37.34 million in short positions are stacked around the $0.32–$0.36 price range, according to BeInCrypto. A rapid price surge-triggered by a bullish crossover of the 100-day/200-day EMA-could force these positions into cascading liquidations, amplifying upward momentum, as BeInCrypto notes.

Open interest in SEI derivatives has also contracted sharply, dropping to $63 million from peaks above $160 million, according to Brave New Coin. This decline suggests that speculative capital has largely exited the market, leaving room for spot buyers and swing traders to dominate. However, the presence of negative funding rates (-0.032%) indicates that derivatives traders remain bearish, creating a paradoxical situation where on-chain activity (561,000 daily active wallets and 1.47 million transactions) is rising while the price remains under pressure, according to Codeum.

Liquidity-Driven Price Acceleration: TVL and Whale Accumulation

SEI's ecosystem fundamentals are a critical underpinning for its price action. Total Value Locked (TVL) has surged to $930.59 million, according to AMBCrypto. This growth contrasts with declining DEX volume ($11.55 million daily) and stablecoin liquidity ($202.18 million), which raise short-term caution, AMBCrypto notes.

Whale activity further reinforces bullish sentiment. Large-scale investors have been accumulating SEI, reducing sell-side liquidity and creating favorable conditions for upward movement, as reported in the OKX analysis. This accumulation is supported by a circulating supply of 6.24 billion tokens and a market cap of $1.27 billion, which provide sufficient liquidity to absorb sudden price surges, CoinCentral adds.

Conclusion: A Convergence of Catalysts

SEI's trajectory in late 2025 hinges on the interplay of technical momentum, short squeeze potential, and liquidity dynamics. The symmetrical triangle and W-pattern suggest a high-probability breakout, while derivatives data points to a short squeeze if the price surges past $0.35. Meanwhile, TVL growth and whale accumulation provide a structural floor for the token.

For traders, the key risks include a failure to break above $0.35, which could reignite bearish momentum, and a broader market downturn that dampens altcoin cycles. However, given the alignment of indicators and speculative positioning, SEI appears poised for a liquidity-driven acceleration-provided it can overcome its immediate resistance.