Celestia (TIA), one of the leading IBC blockchains, has recently experienced a sharp decline in market value despite seeing significant growth in its active user base. While the blockchain’s user activity has increased, the overall market sentiment surrounding TIA remains largely negative. In fact, TIA’s price has been on a steady decline over the past month, dropping over 12%, with an additional 6.60% loss recorded recently. This bearish trend has raised concerns about whether TIA can halt its decline or if it will continue falling toward lower price targets, potentially as low as $3.7.

Growth in Active Users, But No Price Recovery

Celestia has seen a notable surge in active users, with the blockchain attracting 62,650 active users over the past week. This places Celestial, the native network of TIA, in second place among IBC chains for user activity. Inter-Blockchain Communication (IBC) allows easy transfer of data between blockchains, and this increased activity highlights growing adoption of Celestia’s network. Despite this, TIA’s price has failed to react positively, continuing to decline. According to CoinMarketCap, TIA’s market cap has decreased by 6.29% to $2.14 billion, and its trading volume has plunged by 48.69%.

This indicates a lack of confidence in the market, with traders not seeing the same potential for growth in TIA’s price despite its expanding user base. In fact, the data suggests that the growing number of active users has not been enough to offset the prevailing bearish sentiment.

Bearish Sentiment and Short Positions

Traders are overwhelmingly pessimistic about TIA’s prospects. The market sentiment remains bearish, as reflected by the dominance of short positions. At the time of writing, the Long-to-Short ratio for TIA is 0.8328, indicating that there are more short positions than long ones. This is a clear signal that traders expect further declines.

Additionally, the Open Interest—the total number of unsettled derivative contracts (mainly futures)—has decreased by 7.33%, dropping to $238.65 million. This shows that investors are increasingly positioning themselves for a downward price movement. The liquidation of long positions, worth $941.10 thousand, has also contributed to the selling pressure, reinforcing the bearish trend.

Lower Price Targets Loom for TIA

AMBCrypto’s analysis suggests that TIA’s price could continue its downward trajectory, with the possibility of testing two critical downside levels. The first level is $3.7, a support zone that could come under pressure if selling intensifies. If this level is breached, TIA could experience further declines, with the next target being $2.2.

This consolidation pattern, where TIA has traded within a channel between key support and resistance levels since June, suggests that the price could either break out to the upside or downside. With the current bearish momentum, the analysis leans toward a potential downward breakout, leading to further declines in the coming weeks.

Can User Growth Reverse the Decline?

The question remains: can the growth in active users and the increasing adoption of the Celestial blockchain be enough to counter the prevailing bearish market conditions? While user growth is a positive sign, the market’s focus on short-term price action and bearish sentiment remains a significant hurdle. If Celestia’s user base continues to grow and the broader market sentiment improves, TIA could regain some lost ground. However, until there is a noticeable shift in sentiment and investor confidence, the downward pressure on TIA’s price is likely to persist.

Conclusion

As it stands, TIA’s active user growth is a promising development, but it is not enough to counter the bearish sentiment in the market. With short positions increasing and trading volume declining, the likelihood of TIA reaching its $3.7 target seems increasingly possible. However, if the blockchain continues to see adoption and if sentiment shifts positively, there could still be hope for a recovery. For now, traders and investors should closely monitor market conditions and be prepared for further volatility in the price of Celestia (TIA).