beincrypto.com
$JUP, the native token of the Solana-based decentralized exchange Jupiter, has maintained a downtrend since July 29.
The altcoin’s decline was worsened by Monday’s market downturn, causing its price to plunge to a five-month low, a level it now risks revisiting.
Jupiter Bears Have the Upper Hand
At press time, $JUP trades at $0.88. The broad market recovery since Tuesday has driven $JUP’s price up nearly 10% in the past 24 hours. However, the 44% decline in its trading volume indicates a negative divergence.
When this divergence emerges, it indicates that the buying momentum backing the price surge is weak. Therefore, $JUP’s rally might be said to have mirrored the general market rebound and not been due to significant demand from its holders.
Moreover, key momentum indicators observed on a daily chart confirm that $JUP’s downtrend is strong. For example, its Aroon Down Line is 85.71% as of this writing. An asset’s Aroon indicator measures its trend strength and identifies potential price reversal points.
When the Down Line is at or close to 100%, the downtrend is very strong. It signals that the asset’s price has consistently made new lows, showing a clear downward momentum.
Further, according to readings from $JUP’s Directional Movement Index (DMI), its negative directional indicator (-DI) (red) currently rests above its positive directional indicator (+DI) (blue), confirming the strong bearish bias against the altcoin.
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This indicator measures an asset’s trend strength. When the -DI lies above the +DI, it signals that selling pressure outweighs the demand for an asset.
$JUP Price Prediction: Short Traders Ravage Market
In its futures market, $JUP traders have primarily demanded short positions since the beginning of August, as evidenced by its negative funding rates. At press time, the token’s funding rate is -0.0048%.
When an asset’s aggregated funding rate across cryptocurrency exchanges is negative, it means more traders are buying the asset, expecting a decline, than those buying in anticipation of a rally.
This is a bearish signal because it reflects traders’ expectation that prices will decrease as they are willing to pay to maintain their short positions.
If $JUP maintains its downtrend, its next price target is $0.65, a 26% fall from its current value.
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However, if market sentiment shifts and an uptrend ensues, the altcoin may rally to $0.93.