- Safemoon had a spectacular week as it defied gravity.
- The coin has the potential to dip by as much as 30% soon.
Safemoon defied gravity earlier this week as demand for the token rose. This recovery has now become shortlived as the coin has crashed by about 30% from its highest level this week. The Safemoon price is currently trading at $0.00073, bringing its total market cap to about $406 million.
Why is SFM crashing?
Cryptocurrency prices have been in a strong bearish trend this week as investors price in multiple risks that exist in the industry. Some of these risks include the hawkish monetary policy by the Federal Reserve and the recent crash of Terra’s ecosystem.
Safemoon has been controversial since it was established during the meme token euphoria period in 2021. At the time, the token gained popularity as many well-known celebrities endorsed it. Buyers believed that the coin could become the next Dogecoin.
Since then, Safemoon has gone through multiple iterations. The most important one was the shift from V1 to V2. V2 is now a public DeFi protocol that has four main parts whenever a trade happens. Holders of the token receive 4% of fees whenever a transaction is done.
Here’s a step-by-step guide on how to buy Safemoon.
3% of the funds are added to the platform’s liquidity while 2% of the tokens are burnt. Finally, 1% of these funds are allocated towards the Safemoon Ecosystem Growth Fund. The V2 has been relatively popular among creators.
It is unclear why the Safemoon price jumped sharply earlier this week. A possible reason is that the developers are selling their Space Capsule Drop #1 for $245. The capsule is made up of t-shirts, caps, mugs, and other items. Ironically, the platform is selling them in US dollars and not the SFM token.
Safemoon price is also falling after Ethereum managed to break its bearish pennant pattern on Thursday. This was a sign that the other altcoins will continue falling during the weekend.
Safemoon price prediction
The SFM price made a strong recovery earlier this week. As it rose, the token managed to move to the 78.6% Fibonacci retracement level. These gains were short-lived as the cryptocurrency made a strong pullback and is now trading between the 38.2% and 50% Fibonacci retracement levels. It has also moved between the 25-day and 50-day moving averages.
Therefore, for now, the Safemoon price will likely maintain its bearish trend as sellers target the key support level at $0.00050, which is the 23.6% retracement level. This price is about 30% below the current level.
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