WAVES drops 50% in one week and could drop another 30%, analyst says

WAVES ended March as one of the most valued cryptocurrencies in the month. However, the tide completely turned in the first week of April. Between the 1st and 8th, the price of the cryptocurrency dropped from $55 to the current $23, according to data from CoinMarketCap.

That is, WAVES dropped more than 50% in just seven days. If counting from March 31, the drop was even more expressive: 64%. To top it off, the price has broken through a relevant support and, according to trader Yashu Gola, could drop another 30% in the last few days.

Waves additional correction

According to Gola, the WAVES correction caused the price to break below a confluence of two important averages. The first is the 50-day moving average, which was at $29.38, and the second is the 61.8% Fibonacci line ($29.58).

With the loss of this confluence, now only the $25 region is left acting as support. This was the lowest price recorded between October 2021 and the start of the current rally in March 2022. So this is a very solid support.

If the price breaks below $25, WAVES can seek the region of its 200-day simple moving average (200-day SMA; the orange wave). In this case, the price would drop another 30% from current values, approaching $20.

On the other hand, WAVES may find buying strength to retest the 20-week average (the green wave). If the cryptocurrency manages to regain the confluence, then the next target estimated by Gola is the $70 region.

Accusations affect WAVES price

The WAVES correction moment came in the wake of a series of accusations that the cryptocurrency was the equivalent of a “Ponzi scheme”. Accusations were made by the user 0xHamZ through Twitter.

According to 0xHamZ, the Waves team would have artificially inflated the cryptocurrency’s price by more than 650% from February to March. This price increase would be caused by the issuance of Neutrino Dollar (USDN), a stablecoin that runs on WAVES. The organization would be issuing USDN to buy WAVES, causing an artificial valuation.

As a result of the accusations, the USDN lost 15% of its value this week and is no longer pegged to the dollar. The instability also contributed to the drop in WAVES and may continue over the next few days.