0x (ZRX) Struggles to Find Footing, Searches for Support

Unless the price manages to break out from the current pattern, ZRX is expected to drop back in order to re-test these supports.

ZRX Searches for Support

ZRX has been decreasing since Aug 21, when the price reached a high of $0.96. Since that time, ZRX has lost around 63% of its value. Its local low was reached on Sept 23 when it hit $0.335. The price is approaching a significant support area at $0.293, which is the 0.786 Fib level of the entire downward move. If this support fails, the next support level would likely be found near $0.21. Conversely, the closest resistance area is found at $0.43. This is a level that has rejected the ZRX twice since the aforementioned Sept 23 low.

Examining the Trend

Technical indicators in the daily time-frame are leaning on being bearish. While the MACD is positive, it has been steadily decreasing over the past week. The RSI has been rejected by the 50-line and is beginning to drop, while the Stochastic oscillator is in the process of making a bearish cross (shown with the red circle below). This suggests that a decrease towards the support area at $0.273 could occur.

Shorter-term time-frames show a descending resistance line, which has rejected ZRX multiple time up to this point. In addition, it’s possible that the price is trading inside a descending triangle, even if the support line has not yet been confirmed. While the triangle is a bearish pattern, there is a possible bullish divergence developing in both the RSI and MACD, indicating that an upward move could soon follow. If ZRX gets rejected by the resistance line once more to create another lower high, it would make it likely that the price revisits the support zone of the triangle soon after. The RSI movement above and below 50 is indicative of consolidation, which is customary before a significant move in one or the other direction.

Wave Count

Cryptocurrency trader @Mesawine1 outlined a ZRX chart which suggests that the price is in a B wave, which is expected to take the price towards $0.50, before a final decrease drop back to $0.23. The latter level would coincide with the previously outlined support area.

While the decrease since the aforementioned Aug 21 high definitely looks like a bearish impulse (shown in black below), due to the presence of the triangle, it seems more likely that the price is still in wave 4 rather than having completed the impulse. The reason for this is the extended third wave, whose sub-waves are shown in red. If ZRX breaks down from the triangle, it would be expected to drop further towards the support levels previously outlined. An increase above the sub-wave C high of $0.435 would invalidate this particular wave count.

To conclude, the ZRX price is possibly trading inside a descending triangle, from which it is expected to break down. For BeInCrypto’s latest Bitcoin analysis, click here! Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.