AI16Z token rally falters as bear pressure gains momentum

Leading AI agent token AI16Z has emerged as the market's top performer with an 8% price increase in the last 24 hours. During that period, transaction volume rose 34 percent, totaling $452 million.

However, technical indicators suggest that this bullish momentum may be short-lived as the AI16Z token rally appears to have been fueled by speculative trading.

AI16Z Rally support is missing

A review of the AI16Z/USD one-day chart shows that the altcoin broke below the 20-day exponential moving average (EMA) during Thursday's trading session.

An asset's 20-day EMA measures its average price over the past 20 days, giving more weight to recent prices to reflect current market trends. When the price falls below the 20-day EMA, it signals a weakening of the bullish momentum and a possible transition into a bearish trend.

Traders often take this as a sign of reduced buying interest and interpret it as a sign to exit long positions and take short positions. For AI16Z, this dip below the 20-day EMA indicates that the recent rally is running out of steam, putting the gains at risk.

Notably, the altcoin's negative Elder-Ray index supports this bearish view. In this article, it stands at -0.34, which strengthens the bearish pressure.

This momentum indicator measures buying (bull power) and selling (bear power) pressure by comparing the high and low prices of the asset against the moving average.

When the index is negative, especially during the rally, it indicates that the bearish pressure will overcome the bullish momentum. This suggests that the AI16Z price rally lacks strong buyer support and may be driven by speculation rather than sustained demand.

AI16Z Price Prediction: Demand May Raise Rally to All-Time High.

At the time of publication, AI16Z is trading at $1.56. According to the Fibonacci Retracement tool, an increase in bearish pressure may cause the token price to fall below $1 USD, which may drop to $0.68.

On the other hand, increasing actual demand for AI16Z could offset this pessimistic outlook. In that case, the price of the AI16Z token could rise to a high of $2.50, which it finally reached on January 2.