Synthetix (SNX) Breaks Down Below $3

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Despite a break­out from a long-term ascend­ing sup­port line, Syn­thetix (SNX) is show­ing bear­ish signs in short­er time frames.

SNX has been falling since reach­ing an all-time high price of $28.93 in Feb 2021. The down­ward move­ment has so far led to a low of $1.42 in June.

The price has been increas­ing since and broke out from a descend­ing resis­tance line in July. The break­out was pre­ced­ed by a very con­sid­er­able bull­ish diver­gence in the week­ly RSI (green line).

Pri­or to the break­out, the line had been in place for 525 days. Break­outs from such long-term struc­tures usu­al­ly lead to sus­tained upward movements.

How­ev­er, SNX failed to sus­tain its upward move­ment, only man­ag­ing to reach a high of $4.64 before falling.  Due to this decrease, the week­ly RSI also failed to move above the 50 line.

If the upward move­ment con­tin­ues, the clos­est resis­tance areas would be at $7 and $11.90.

Ongoing SNX breakout

The dai­ly chart shows that the price has also bro­ken out from a short-term descend­ing resis­tance line. How­ev­er, it was reject­ed by the 0.5 Fib retrace­ment sup­port lev­el and $4.50 hor­i­zon­tal area (red icons). It has been falling since Aug 11.

Addi­tion­al­ly, the dai­ly RSI has bro­ken down from its ascend­ing sup­port line (green line), some­thing that often pre­cedes price rever­sals. More­over, the RSI has now fall­en below 50.

So, the dai­ly time frame read­ings are bear­ish and sug­gest that new lows will fol­low. This is in con­trast to the read­ings from the week­ly time frame, which are still rel­a­tive­ly bullish.

Short-term movement

Cryp­tocur­ren­cy trad­er @AlparslanAntpgl tweet­ed a chart of SNX, stat­ing that the price has bro­ken down from an ascend­ing sup­port line.

The wave count shows that SNX has com­plet­ed an A‑B-C cor­rec­tive struc­ture (white), in which waves A:C had a 1:1 ratio. In it, wave C devel­oped into an expand­ing end­ing diag­o­nal, hence the shape of an expand­ing wedge.

If cor­rect, the upward cor­rec­tive move­ment is now com­plete and the price has now begun a new down­ward move­ment. So, the short-term read­ings sug­gest that the price will decrease towards its June lows and poten­tial­ly break down.

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