Key Takeaways:
- NEXO token loses balance and drops 40%.
- The lending protocol extended a offer to Celsius, but the latter declined.
- However, the platform insists it will not go down like Celsius.
YEREVAN (CoinChapter.com) – Nexo, the lending/borrowing platform with the same-named token, saw its rate drop 43% in the previous week, following Bitcoin’s bearish narrative. As a result, the digital asset declined to a 1.5-year low and traded at $0.7 on June 15.
NEXO daily chart bearish
However, it is not yet clear whether NEXO’s bottom is in. The digital asset confirmed the previously formed Descending Triangle pattern and met the bearish expectations. In short, the formation consisted of a flat support and a descending resistance.
NEXO price action consecutively retested the two trendlines since May 11. Moreover, the token broke below the Triangle’s significant support and declined an additional 40%.
Also read: NEXO prices jump 70% intraday on news of Binance listing.
Meanwhile, the sell-off pressure increased, as evidenced by the difference in yesterday’s trading volumes (vertical bars on the chart above). Thus, traders could continue the exit streak, causing more damage to Nexo.
Bullish cues from the RSI
NEXO’s relative strength index (RSI) charted within oversold territory after the drop. In detail, the RSI is a momentum indicator that marks profitable market entry and exit points. It shows a token price deviation from a median value within a certain period.
When the RSI graph (purple on the chart above) slumps below the 30-70 range, traders might consider the token oversold and buy the dip. NEXO’s RSI dropped to an all-time low of 14 on June 15, sending hopeful signals to the bulls.
Also read: Mastercard and Nexo launch crypto-backed credit cards, pushing Bitcoin (BTC) back above $40K.
Moreover, Nexo tweeted its “formal offer” to extend a helping hand to troubled competitor lending platform Celsius.
Following Celsius?
As CoinChapter previously reported, Celsius met a wave of controversy after moving over $320 million to FTX while halting user withdrawals indefinitely. Nexo, on the other hand, offered to help Celsius by acquiring some of its distressed assets just hours after Celsius’s announcement appeared.
Moreover, sources report Nexo was aware of Celsius’s problems beforehand. In an exclusive interview with Blockworks, its spokesperson asserted that the troubled lender refused their help.
From the publicly available on-chain data and client reports, it has been clear for some time that Celsius is having difficulties meeting the withdrawal obligations. From a risk management perspective, our findings have pointed to the unsustainability of Celsius
commented Nexo representatives.
Also read: Luna 3.0? Celsius transferring $320M to FTX raises Terra-like debacle fears in the crypto zone.
Additionally, the company asserted that it has 100% liquidity to meet its debt obligations. However, the Terra implosion and Celsius demise sent ripples and FUD across the DeFi market. As the traders’ fears intensify, many could exit the market, skewing the liquidity.
