SEI Shows Signs of Bullish Reversal with Double-Bottom and Flag Pattern

• SEI forms a double-bottom and flag pattern, indicating a potential trend reversal.
• Active addresses on SEI double, hitting 7.6M amid rising Web3 and DeFi adoption.
• SEI has chosen to help develop Wyomings state-backed stablecoin, WYST.
• Derivatives data hints at a possible short squeeze with negative funding and high OI.

SEI is showing early signs of recovery after weeks of trading lower. 

Market participants are observing bullish patterns and improving fundamentals that could support a potential breakout. Analysts have flagged increasing momentum supported by technical structures and rising user engagement across the SEI ecosystem. 

In addition, SEIs involvement in regulatory and infrastructure developments is drawing interest. These combined factors suggest that SEI could be entering a new phase of growth.

SEI Technical Patterns Suggest Bullish Reversal

According to Coinpedia Markets, SEI has formed a double-bottom structure, with key support at $0.168 and a neckline near $0.272. This pattern is widely recognized in technical analysis as a potential trend reversal indicator. 

Alongside this, a bullish flag pattern has also developed, featuring an initial sharp rise followed by a descending channel, which often signals continuation.

If SEI clears the neckline resistance at $0.272, analysts believe it could target $0.305. Price data from CoinGecko shows SEI is currently trading at $0.2038, up 8.71% in the past 24 hours and 17.21% over the past week. 

Crypto analyst @CryptoBullet1 noted that the assets weekly bounce mirrors a similar move from April, possibly forming a higher low and signaling the beginning of a larger Wave C phase.

Fundamental indicators also point toward growing demand for the SEI network. Coinpedia highlighted that transactions on SEI surged by 30%, totaling over 35 million. 

Active addresses on the network doubled, reaching 7.6 million, indicating a sharp increase in user engagement. Meanwhile, the chain ranked second in Web3 gaming, recording 2.5 million weekly unique active wallets and 29 million gaming transactions.

In the DeFi space , SEI holds a total value locked (TVL) of $550 million and a stablecoin market cap exceeding $215 million. These figures place the token ahead of other chains like Hedera Hashgraph, Cardano, and Algorand in user engagement and liquidity, according to Coinpedias market update.

SEI Strategic Partnerships and Regulatory Moves

SEIs expanding role in digital infrastructure has also strengthened its position. 

The Wyoming Stable Token Commission selected SEI to support the development of WYST, the first U.S. state-backed stablecoin. This move highlights growing institutional confidence in SEIs capabilities and regulatory alignment.

Additionally, the cryptos integration with LayerZero has improved cross-chain functionality, boosting its reach across blockchain ecosystems. 

These infrastructure moves aim to enhance SEIs visibility and usability across decentralized applications and services. According to Front Runners, the token has seen unusual activity in the derivatives market. Reports suggest that large long positions were opened near recent lows, resulting in a 10% price bounce. 

Despite the upward move, funding rates remain deeply negative, indicating high short interest.

Analysts believe this could set the stage for a more intense short squeeze if bears are forced to cover. Front Runners noted that open interest remains elevated compared to other altcoins, suggesting that the current move might be early in its development.