ChainOpera AI soars 25% – But is COAI’s rally too good to last?
Assessing why COAI's surge could be at risk.
Key Takeaways
Why is COAI up today?
ChainOpera AI rose by 25%, driven by liquidations of shorts, strength in BSC, and listings on major CEXs.
What’s the next target?
COAI price needs to flip the $7.91 level for the structure to stay bullish; otherwise, the outlook is still bearish.
ChainOpera AI [COAI] surged by more than 25%, beating the overall market trend, which was down by about 3% in the last 24 hours.
The resurgence came as the price of the altcoin stayed about 85% from its ATH of almost $45.
When writing, COAI had a market cap of $1.29 billion, with still another $1.35 billion in capitalization yet to be unlocked.
Despite the spike in gains, the daily trading volume was down about 50%, representing about $75 million.
What’s driving the rally?
The surge was driven by cascading short liquidations, exchange listings, and the general strength in BNB Smart Chain (BSC).
An analysis of the liquidation heatmap on CoinGlass showed that shorts in the $7 zone were liquidated, triggering buy pressure.
About $11.5 million in COAI was cleared, and then the price sharply dropped below this level. The buy orders around the $5 zone indicated the strength of bulls, which took the price up.
Additionally, the listing of COAI on Bitget and Gate.io amplified the gains as a result of increased user reach. Lastly, COAI was among the top tokens on BSC, with the ecosystem continuing to thrive since August.
Will COAI stay strong onwards?
On the 4-hour chart, it revealed that after a sharp change in favor of the downward direction, price was recuperating slightly, with COAI trading at about $6.5.
Despite the slight strength, indicators were showing weakness. The Bollinger Bands were narrowing between $2.41 and $13.41, which meant it was becoming less volatile.
This suggested the possibility of a consolidation, especially if $7.91 succeeded in rejecting further uptrends.
The Momentum indicator also indicated a weak bullish drive of -0.1445. The Money Flow Index, at 30.82, stressed capital outflow, indicating oversold conditions.
In the meantime, the On-Balance Volume (OBV) at -472.526M showed constant selling pressure, even though this had improved slightly.
COAI seemed to be moving up toward the $7.91 resistance. However, until a bullish reversal is evident, buyers must obtain more convincing evidence.
Why is the rally at risk?
This surge was met with slight profit-taking of about 53.75 million COAI, which is about 5% of the circulating supply, heading into exchanges. This explained the drop from levels above $7.
However, a concerning issue arose when analyzing the distribution of token holder addresses. The top 100 addresses held more than 94% of the tokens, allowing for easy manipulation of the COAI price.
Still, the acquisition of only 0.05% of the circulating supply meant that few traders were willing to buy the token.
Altogether, caution was needed in the backdrop of this rising price action.
