Digibyte Rally Could Send Prices Soaring

However, the price is trading inside a crucial resistance area, which could cause a short-term decrease.

Digibyte Long-Term Breakout

At the beginning of April, the DGB price broke out from a descending resistance line that had previously been in place since 2018. The price continued increasing at an accelerated rate and reached a high of 294 satoshis on May 6. However, the higher prices could not be sustained, and DGB decreased below 250 satoshis, where it has been trading since. This movement validated the 250 satoshi area as resistance. This same area had acted as support for the majority of 2018 and 2019, increasing its validity. A breakout above this area would likely trigger a rapid increase. However, the decreasing volume and bearish divergence in the RSI indicate that the price is more likely to get rejected and begin a downward move.

Symmetrical Triangle

The daily chart shows that the price has been trading inside a symmetrical triangle since the aforementioned high of May 6. At the time of writing, the price was trading directly under the resistance line of the pattern, having created several long upper-wicks, a sign of selling pressure. However, the 50 and 200-day moving averages (MA) have made a bullish cross, and are offering support to the price. This is a sign that the price is in an upward trend. Furthermore, there is no bearish divergence in the RSI, which above 50, so daily technical indicators provide a bullish outlook. Even though the symmetrical triangle is considered a neutral pattern, it is transpiring after an upward move, so a breakout would be expected.

Wave Count

Measuring from March 17, the price seems to have begun a five-wave Elliott formation. After finishing an extended third wave, the fourth is transpiring inside an A-B-C-D-E formation. Wave 4 often transpires inside triangles, so this wave count fits perfectly. A breakout that would travel the entire height of the pattern could take the price to 365 satoshis, finishing the fifth wave. Cryptocurrency trader @CryptoMichNL outlined a DGB chart, which shows the price trading inside a symmetrical triangle. He gave a target of 365 satoshis for the possible breakout. This target would be reached if the price traveled the entire height of the pattern, so it is a likely target for the top of the move.

To conclude, the DGB price is trading inside a symmetrical triangle, out of which a breakout would be more likely.  However, the bearish divergence in the long-term chart casts some doubt in the possibility of this breakout transpiring.