Key Findings
What do elevated MFI readings alongside an oversold RSI value for GAIN imply regarding its future price trajectory?
These signals hint at a possible price resurgence, provided buying interest persists and upward momentum gathers steam.
How are traders of GAIN’s derivatives handling the token’s volatile activity after the security breach?
Despite prominent selling volumes, increasing funding percentages, coupled with large buy positions, may point toward a potential return to an upward climb.
The marketplace performance of Griffin AI [GAIN] has rattled a few investors as the asset plummeted 78% in the wake of a substantial BNB Chain breach.
Investors aren’t throwing in the towel just yet. Market indicators reveal active buying of the asset, signaling that some view this downturn as a chance to acquire GAIN at a lower price.
Currently, GAIN has seen a 17% increase over the last 24 hours. Nonetheless, caution remains – is this a long-term uptrend, or could it be a temporary “bull trap?”
Our team at AMBCrypto performed an analysis to offer some insights into what the future may hold for GAIN over the short term.
Assessing GAIN’s Hack and Rebound Potential
The team announced that a recent security incident was directed towards GAIN’s BNB Chain.
Criminals took advantage of weaknesses in the protocol to create 5 billion GAIN tokens, estimated at approximately $110 million, and then sold them off to regular consumers. The event triggered a significant disturbance in liquidity for the asset.
The price chart clearly highlights this significant occurrence, marked by an intense, rapid drop, which was followed by unstable and unpredictable price behavior.
It is worth noting that, in the midst of this erratic movement, GAIN seems to have established a probable support level, identified in technical analysis as a “double bottom” formation.
However, this particular level of “double bottom” could lead to a “trap.” It may induce a “stop hunt,” where buyers get eliminated prior to a substantial increase in the asset’s price.
Will GAIN Experience Another Price Decline?
According to AMBCrypto’s analysis, the current technical indicators suggest a potential for future price decrease.
The Money Flow Index (MFI) and the Relative Strength Index (RSI) both exhibit bearish signals, though there is an important detail to note.
The MFI operates on a spectrum from 20 to 80. Readings from 20 to 50 usually represent outflows of liquid assets and a generally negative outlook, whereas figures above 50 point to the presence of financial activity and market excitement.
Source: TradingView
At the time of this writing, GAIN’s MFI was at 46 and showing an upward trajectory. This indicates rising buying actions and bids.
If the MFI goes beyond the 50 mark, it could mean that a rebound is beginning.
In the meantime, the RSI, assessed on a scale of 30-70, showed GAIN in the oversold zone, below 30.
This hints at a potential weakening of selling momentum, and possibly a reversal on the horizon.
Derivative investors are active
Derivative investors are still participating, regardless of the general negative derivative volume, which is visible in the long-to-short proportion across exchanges.
The Long/Short Ratio revealed that buyers are acquiring the asset on Binance and OKX, even while most investors are selling.
Source: CoinGlass
Still, the Open Interest (OI) Weighted Funding Rate points to prevalent selling in the derivative market, as the majority of financial input is stemming from investors with long positions.
With the OI-Weighted Funding Rate showing an uptrend, GAIN may see increased activity in the coming sessions, which could create a move to higher price levels while pulling out of the sales environment created by the hack.