1INCH plummet over 40% from the local peak: Is a buying opportunity opening up?

1inch (1INCH) is currently exhibiting a market structure leaning towards 下行 along with a clear weakening in momentum. Although the bears are temporarily in control, the price seems to have established a local bottom and is likely preparing for a short term bounce back.

From July 13 to August 2, the 1INCH token fell by 40.7%, from a local peak of $0.391 to a low of $0.232.

Daily chart of 1INCH/USDT | Source: TradingViewHowever, when observing on a longer time frame, the upward trend has not yet been completely broken. Notably, the recent correction has brought the price back to the area that previously acted as strong resistance in May – which may now be turning into a potential support zone around the $0.24 mark. The fact that this price zone is being tested continuously recently is a positive signal for long-term investors and may open up an attractive accumulation opportunity.

However, the technical indicators – which often react slowly – are giving mixed signals. The Chaikin Money Flow (CMF) is currently at -0.26, reflecting that selling pressure has still been dominating in the last two weeks. In contrast to the CMF, the accumulation/distribution (A/D) has been almost flat over the past 10 days, indicating that the actual selling pressure is not particularly significant.

The MACD indicator continues to support the downtrend, indicating that the downward momentum is still strong. Although technical indicators have not confirmed the possibility of a reversal, the price movement is subtly reflecting the opposite. So, is the on-chain data revealing a different story?

Cautious sentiment and stable accumulation trend indicate the price increase prospects of 1INCH

Bitcoin Magazine reports that the weighted sentiment index (weighted sentiment) has remained at a negative level for most of the second half of July, reflecting the prevailing pessimism in the market. On August 3, although the funding rate has slightly decreased into negative territory, it quickly bounced back – indicating a clear hesitation from traders. Concurrently, the open interest (OI) continues to decline, reinforcing the view that cautious sentiment is dominating the derivatives market.

Source: SantimentThe combination of these factors shows that the level of interest on social media is falling, and speculators are still maintaining a cautious stance, not yet ready to enter the market. However, this alone is not enough to make a buying or selling decision – what is more noteworthy lies in the mean coin age indicator, which paints a different picture.

In the period from the end of June to mid-July, the mean coin age decreased significantly, reflecting active token movement and profit-taking. However, the last two weeks have recorded a reversal – this indicator has begun to bounce back, indicating that an accumulation process is quietly occurring across the network.

Combined with the fact that the price is testing the important horizontal support zone at the level of $0.24, the possibility of a bullish reversal is becoming increasingly evident. Investors currently can only hope that Bitcoin (BTC) has established a local bottom around the $112,000 region over the past weekend.

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