Pyth Network [PYTH] erased the past week's gains - what's next for the altcoin?

Pyth Network [PYTH] was up 5.6% in the 24 hours preceding press time. However, its Trading Volume during the same period was 15% lower than the day before.

Pyth Network (PYTH) price was up 5.6% in the 24 hours to 07:05 ET Friday morning, but its trading volume was lower for a fifth straight day of trading.

The cryptocurrency, which is used to provide data to decentralized finance (DeFi) protocols, had erased all of the gains it made over the past week.

It appeared that traders were placing their bets on the token to move sideways rather than generate gains in the short term.

PYTH erases the past week’s gains- what’s next for the altcoin?

Source: PYTH/USDT on TradingView

On the 6th of May, PYTH began a rally that took it from $0.128 to $0.211. This rally marked a 64% gain over a period of three days.

Trading volume surged significantly on the final day of the rally, which later turned out to be a blow-off top in a lower timeframe.

Following this rally, PYTH experienced a steep retracement, dropping to the breakout base level.

The OBV displayed a spike during the rally but formed a lower high during the retracement. At the same time, the MACD was spotted making a bearish crossover and falling below the zero line.

The OBV appeared to be recovering slightly, but the overall trend indicated that the short-term market sentiment towards PYTH was neutral.

From a market structure standpoint, the recent drop below $0.135 was a bearish signal for the token.

A minor bounce followed by further losses seemed like a plausible scenario in the upcoming days.

Heatmap signals bounce zone, but trend favors bears

Source: Coinglass

The 2-week Liquidation Heatmap from Coinglass highlighted the $0.137-$0.15 area as a magnetic zone, which was closely related to the price of PYTH.

Considering this, it was highly probable that the Pyth Network token could experience a 10% price rebound within the week.

However, such a bounce wouldn’t necessarily alter the existing trend.

In fact, the bears had already wiped out all of the gains made by the token over the past week. Momentum was currently in their favor, and there were no immediate signs of them relinquishing control.

Only a move above $0.16 would indicate that the bulls were finally winning this battle. Until then, traders should proceed with caution before going long on PYTH.