SEI Eyes Breakout; Bullish Trend Emergence Possible

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On March 15, the price of SEI reached a high of $1.15, culminating a robust uptrend from a low of $0.10 in October 2023. However, the price soon embarked on a downward trajectory, moving within a descending channel. By April 13, SEI had plummeted to a low of $0.41, but it managed a swift recovery, closing at $0.48. The upward momentum continued, nearing $0.70 by April 22. Despite this recovery, SEI retested its low on May 13, finding support above the $0.40 mark and rising 33% to $0.60, nearing its descending resistance line.

Nonetheless, SEI faced rejection at this resistance, leading to another drop, hitting a low of $0.23 on July 5. Though the price increased as it approached the descending resistance, a breakout could potentially signal the start of a major bullish trend. On July 5, the daily chart RSI dropped to 25%, indicating extreme oversold conditions, but has since recovered to nearly 40%. The MACD technical indicator is also beginning to show signs of a potential reversal with its moving averages converging positively.

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An examination of the 4-hour chart reveals a five-wave pattern in the recent descending move from April 22. This wave structure suggests that the downward trend could have ended or is nearing completion. The price action has recently taken on a bullish character, establishing a slightly higher low of $0.24 on July 8 and rising over 25% since then. A breakout above the descending resistance could be anticipated. Such a move would offer the first confirmation of an emerging uptrend, given that this resistance has been a significant barrier since March 15.

Should SEI break above this descending resistance, the next logical target would be the horizontal resistance at $0.50. This level could mark the end of the first sub-wave at a lower degree. A continued rise to $0.50, followed by a higher low above $0.30 on any subsequent downturn, would offer a second confirmation of the uptrend.

The most compelling signal of a nascent uptrend would be a clear breakout above the $0.50 resistance area. If this scenario unfolds, SEI could be positioned to surpass its all-time high of $1.15 later in 2024 or early 2025.