Traders need to watch out for this bullish trap that SafeMoon price is forming
- SafeMoon intraday price looks promising.
- Nonetheless, SFM price is struggling to close above the 55-day SMA, so traders should tread carefully.
- An initial pullback could eventually lead to gains as the market downturn may end this week.
SafeMoon (SFM) price looks promising today for a quick rally and a test of the technical moving average at around $0.000600000. With the current slump in global markets, tail risks are still very present and could erupt at any moment, triggering a violent reversal with risk sentiment returning to safe havens and away from cryptocurrencies. SFM price will likely fail to close above the technical moving average and trigger a drop to $0.00050000 as price action consolidates towards a breakout later this week.
SFM price should consolidate in this soft patch
The price of SafeMoon could surge and reach $0.000600000 in the next trading session as the bulls try to retest the 55-day simple moving average (SMA) as happened in the previous days. The risk, however, is that the bulls stay in their positions too long and get swept away as the price action returns to the downside and the bears arrive to defend with all they have. A daily close above the MA would be a necessary precondition for further increases in the SFM price, but the additional 61.8% Fibonacci level may limit further progress and bridge too far.
SFM price holds around 10% hypothetical gains before hitting this 55-day SMA. As it rises, the Relative Strength Index (RSI) will be driven higher, limiting further upside potential. Add to this the mentioned pressure of the 61.8% Fibonacci level at $0.000611824, and a double belt of resistance is identified.
SFM/USD daily chart
Downside risks come from markets speculating that the peak of inflation has been reached and that a recession is on the way. A few data releases from the past week showed signs that a recession is potentially approaching, with manufacturing and services confidence numbers falling, but consumer confidence still elevated. If this week’s economic data further confirms this narrative, expect to see the difficult period reverse quickly with markets back in crisis and the price of SFM falling from its current position at $0.000500000. There is even a possibility that SafeMoon price may decline on a wave of risk towards $0.000342750 and the 78.6% Fibonacci level, coming to act as a safety net below.