NEM has been in selloff mode over the past few days as rumors of its bankruptcy broke out. However, the NEM Foundation has been quick to address these rumors, so the nearby support areas might hold.
Price is trading below a descending trend line on the 1-hour time frame and was barely able to make a pullback before selling pressure picked up. The Fibonacci extension tool on the shallow correction shows the next downside targets.
NEM is already testing the 38.2% level but looks ready to head further down to the 50% extension. Stronger selling pressure could drag it to the 61.8% level at 0.03569 or the 78.6% extension at 0.03407 mark. The full extension is around the 0.03200 major psychological level.
Volume has been elevated as bearish momentum kicked in on the news, signaling that there could be more to this move down. Stochastic, however, is already indicating oversold conditions or that sellers are exhausted. RSI is also starting to turn up from the oversold region to indicate that buyers are eager to return.
Still, the 100 SMA is safely below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This means that the selloff is more likely to gain traction than to reverse.
Speculations of bankruptcy swirled as the company applied for new funding with a VC and confirmed the layoffs. The NEM Foundation Secretariat Office under the leadership of Foundation President Alexandra Tinsman explained the company’s future plan of action, which involves sorting their existing troubles in the smoothest manner possible.
Their response indicated:
No, the current Foundation is not bankrupt. We are running low on XEM and FIAT funds. The 2019 Foundation is currently preparing a plan to achieve funding for the rest of the fiscal year and the restructure was place as a cost-saving measure.
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