Decoding Thursday's SIREN bull trap and what's next for traders

Bitcoin has shed 1.5% of its value in the last 24 hours, with the crypto down by over 15% over the past week. As expected, this has dragged the altcoin market's sentiment down with it, with total capitalization falling 9.7% over the same period. Per Glassnode, the memecoin sector took a 10% hit too. Weak altcoins, especially those without a narrative or demand to speak of, can keep bleeding against Bitcoin even if BTC eventually finds its footing. Siren [SIREN] lost 12% in the last 24 hours. Its daily trading volume dropped 40%, while Open Interest fell 17% — both signs of sidelined participants and a notable lack of appetite for risk-taking.

In a previous report, AMBCrypto had explored whether the temporary price spike on Thursday, 04 June, could mark a bullish reversal. A flip of the $1.13 resistance was needed to confirm a longer-term trend reversal. As Bitcoin inched closer to the $60K-mark, though, sentiment turned increasingly fearful — because of course it did. This has since weighed on SIREN's price action.

The drop to $0.131 in April shifted the 1-day SIREN structure bearishly. A sizeable relief rally peaked in May and reversed quickly, leaving a large fair value gap (white) on this timeframe. It stretched from $0.956 to $0.588. Some technical analysts like to use the mid-point of such a gap as support or resistance. SIREN, true to form, reacted bearishly from that midpoint. The former local high at $0.672 (orange) was flipped to support in the last 36 hours, but the bulls couldn't defend it for long. At press time, the price action showed SIREN slumping back below this level.

Combined with the higher timeframe structure, the rejection from the FVG's midpoint, and the bearish pressure piling onto Bitcoin, it looks like SIREN could fall toward the $0.575 and $0.48 local support levels next.