The cryptocurrency market is experiencing significant volatility, with both Bitcoin (BTC) and Ethereum (ETH) trading lower. This downturn has led to approximately $882 million in total liquidations, with long orders accounting for nearly $765 million.
In line with the broader market correction, major memecoins are also facing downward pressure. SPX6900 (SPX) has seen an 8% drop today, bringing it to a crucial level that could dictate its next significant price movement.
Head and Shoulders Pattern in Play
On the daily chart, SPX appears to be completing a Head and Shoulders pattern. This is a classic bearish setup that often indicates the end of an uptrend and the potential beginning of a reversal.
The token recently encountered strong resistance and was rejected from its 200-day moving average (MA) near $1.19, which has further fueled bearish sentiment. Since that rejection, SPX has fallen into a critical support zone situated between $0.85 and $0.95. This area has historically acted as a robust demand base during previous market corrections.
The current structure of the pattern, characterized by three distinct peaks and a neckline support that is now under pressure, closely resembles previous setups that preceded significant breakdowns in other altcoins. Market participants are closely observing this support zone, anticipating whether buyers will step in to defend it once again.
What’s Next for SPX?
SPX is currently positioned at a pivotal point in its price action. If bullish forces successfully defend the $0.85–$0.95 range and manage to push prices back above the 200-day MA, which is currently at $1.1968, this could initiate a short-term recovery rally. Such a rally might target the $1.60 region, effectively invalidating the bearish Head and Shoulders setup.
Conversely, if this crucial support zone fails to hold, it would confirm a neckline breakdown from the Head and Shoulders formation. This scenario would likely lead to a more substantial correction, potentially pushing the price down towards the $0.25 area in the upcoming weeks.
The outcome of this support retest will be critical in determining whether SPX can stabilize and potentially rebound, or if it will continue its downward trajectory amidst the prevailing weakness in the broader market.