SEI's price is at a critical support level and forming a head and shoulders pattern, which may indicate a downward movement.
Critical Support at the Neckline
SEI's price action over the past few months has presented a classic head and shoulders pattern, a well-known bearish technical signal. The asset surged from March to June 2025, forming the left shoulder and the head at its peak, as per an analysis shared by Alpha Crypto Signal. A subsequent pullback occurred, followed by another upward attempt, forming the right shoulder. The neckline, drawn across the troughs between these three price points, has emerged as a key support level.
As of now, SEI is testing the neckline and showing signs of weakness. A breakdown below this crucial level would confirm the head and shoulders formation, signaling a likely further downside. The price is already flirting with a decline below the neckline, signaling a potential bearish reversal.
Volume Decline and Moving Averages Point to Bearish Sentiment
Volume is another important indicator to watch in this setup. During the formation of the left shoulder and head, volume surged, reflecting strong buying interest. As SEI's price approached the right shoulder, trading volume started to drop, signaling that the buying pressure was weakening.
This decrease in volume points to a lack of strong interest from buyers, which could suggest that a downward move is more likely. SEI is trading below both the 9-day EMA at $0.2993 and the 50-day SMA at $0.3194. This suggests that the coin could have a hard time moving up unless there’s a quick reversal.
Possible Scenarios for Future Movements
While the current setup leans bearish, SEI is still in a consolidation phase, and the market hasn’t made its next move yet. A breakdown and close below the neckline would open up the possibility of a retest of lower levels. In this case, traders could look for a more favorable short entry when the price begins to retest the neckline as resistance.
The current price structure of SEI suggests a potential bearish movement if the breakdown of the neckline is confirmed. Traders are attentively monitoring the situation to identify possible signals.
