Since 2024, the performance of Inscription tokens ORDI and SATS has lagged relatively behind the overall cryptocurrency market and is showing signs of possible further decline.
In January, the entire cryptocurrency market experienced significant declines in multiple digital assets, including the most affected Inscription Token (also known as BRC -20 tokens) ORDI and SATS.
The lackluster performance of these unique coins is not only influenced by Bitcoin's recent price fluctuations, but also by several other key factors.
It is worth noting that , as of now in 2024, the prices of ORDI and SATS have experienced approximately 34.50% and 50% declines respectively.
The main reason for this decline is that the entire cryptocurrency market, especially the market led by Bitcoin, is permeated by a "selling news" sentiment. As of January 25, ORDI’s correlation coefficient with BTC reached 0.66, which has remained positive in recent history.
In addition to this, this downward trend is consistent with a significant reduction in inscription fees and Bitcoin block size shares, highlighting the weakening demand for Bitcoin ordinal numbers .
The price trend of Inscription tokens is often closely related to BTC, mainly because the Bitcoin ordinal number is directly dependent on Bitcoin’s blockchain. For example, ORDI’s operations involve writing data directly to the Bitcoin blockchain, creating a unique form of digital artifact that exists within Bitcoin transaction outputs.
In addition to broader market trends , a key factor in the recent decline in ORDI and SATS prices is the emergence of bearish divergence signals.
Take ORDI as an example. Its daily chart with USDT showed a typical bearish divergence pattern from December 5, 2023 to January 2, 2024. Simply put, ORDI’s price is forming higher highs, but its relative strength index (RSI) is showing signs of heading lower.
The subsequent 45% retracement is consistent with a bearish divergence signal, where the divergence between RSI and price action precedes a correction in price.
Similarly, for SATS, its price experienced a bearish divergence signal of rising price and falling RSI in an uptrend, resulting in a decline of more than 60%.
Overall, the bearish divergence on the ORDI and SATS charts is worth watching for traders as it hints at a potential trend reversal, or at least the current one. A temporary break in an uptrend.
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