Celestia (TIA) Price Nears Oversold Region Following 12% Price Decline

TIA, the native token of the modular blockchain project Celestia, continues to face torrid periods. Trading at $5.32, the price represents a 12.37% decline in the last 30 days.

As time passes, indicators show that TIA may extend its losses as it approaches a crucial point. Here’s what to expect.

Celestia Holders May Need to Deal With Another Decline

An evaluation of the daily chart reveals that the Relative Strength Index (RSI) reading is 38.86. The RSI is a technical indicator that measures the speed and price changes of a cryptocurrency. Furthermore, the oscillator determines if an asset is overbought or oversold.

When the reading is 70.00 or above, the asset is overbought. But a reading at 30.00 or below points to an oversold condition. Therefore, the RSI decline on Celestia’s chart indicates that the token could be heading toward the oversold zone.

If the momentum reading continues to slide, TIA’s price may also continue to fall. If that happens, the cryptocurrency’s value may drop below $5.

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Celestia Relative Strength Index. Source: TradingView

Consequently, the current state of the cryptocurrency has driven traders in the derivatives market to hold positions supporting a bearish bias. The Funding Rate, as shown by on-chain data, reveals this.

The Funding Rate represents the difference between a cryptocurrency’s contract price and the spot price. A positive value indicates bullish expectations from traders, while a negative reading indicates that the perpetual price trades lower than the spot price, suggesting a bearish bias.

At press time, TIA’s Funding Rate is in the negative territory, reinforcing the notion that market participants do not anticipate a price bounce. 

Celestia Funding Rate. Source: Santiment

However, this was the case for most of last month, reflecting the doubt the broader market has around TIAA in the short term.

TIA Price Prediction: Will Liquidity Rise Spark a Bounce?

As of this writing, TIA has been trading within a descending triangle since July 22. In this pattern, the price keeps hitting lower highs while the flat support line consolidates around the same area. 

Typically, this pattern is bearish, and if the token lacks buying power, another breakdown may occur.  Additionally, the Fibonacci Retracement indicator gives an idea of levels where the price may go next as each ratio identifies support and resistance zones.

The most important Fib ratios include 23.6%, 38.2%, 61.8% and 78.6%. From the chart below, TIA’s price has dropped below the 23.6% nominal pullback. Should selling pressure increase, the value of TIA may drop to $4.13.

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Celestia Daily Analysis. Source: TradingView

However, the Money Flow Index (MFI) shows that the Celestia token is starting to experience a rise in liquidity. If this continues, TIA’s price may rebound to $5.98, and the bearish thesis will be invalidated

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