The Reserve Rights (RSR) price returned to validate a crucial support level after previously breaking out from it. Despite the re-test, lower time-frames are showing weakness, suggesting that a drop is expected.
Re-Testing the breakout level
The RSR price has been increasing since a low of $0.0075 was reached on Oct 7. Initially, the $0.0175 area acted as resistance. RSR managed to break out on Nov. 17, proceeding to reach a high of $0.026 on Nov. 24.
However, a drop followed and RSR returned to the $0.0175 area once more, validating it as support and potentially creating a double bottom pattern just above it. However ,the second bounce has been weaker than the first one, a sign of dissipating strength.
Despite the fact that a double bottom is generally a bullish pattern, technical indicators are turning bearish.
The RSI dropped below 50, the MACD is decreasing and the Stochastic Oscillator just made a bearish cross.
Therefore, a look at lower time-frames is required in order to determine the direction of the next move.
Short-term movement
The shorter-term 6-hour chart shows that RSR has been following a descending resistance line since reaching the Nov. 24 high. Combined with the current support, this creates a descending triangle, which is considered a bearish pattern.
A breakdown that travels the entire height of the pattern would take RSR all the way down to the Nov. lows at $0.010, which would be the maximum target for a possible drop. However, it is more likely to find support somewhere between these two levels and begin to move upwards.
Cryptocurrency trader @Daancrypto tweeted out a short-term RSR chart, saying that he is looking to enter on a re-test of the resistance line from which the alt-coin has broken out.
However, RSR has since fallen down below the line, making the previous breakout only a deviation.
This further solidifies the possibility of a breakdown, since such deviations are often followed by a sharp move in the other direction.
If RSR breaks down, the closest support area would be at $0.0152.
Conclusion
To conclude, the RSR price is expected to break down from the current support area and drop towards the support area at $0.0152. The reaction, once it gets there, will be helpful in determining if another drop is in store or if the alt-coin will begin to move upwards once more.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
