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Significant Divergences Form In Synthetix (SNX)

2 mins
Updated by Ryan James
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In Brief

  • SNX has broken out from a descending resistance line.
  • It is trading below the $7.20 horizontal resistance area.
  • SNX is attempting to reclaim the $4.50 level.
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Synthetix (SNX) has broken down from a long-term support area, but is showing strong signs of a potential bullish reversal. SNX has been decreasing alongside a descending resistance line since reaching an all-time high price of $28.94 on Feb 14. More recently, it has been rejected by the line on May 18 (red icon). Afterwards, it started following another descending resistance line, this one steeper than the previous. On Jan 31, it broke out from this line and is currently in the process of validating it as support (green circle). The longer-term resistance line is currently near $10.
Descending resistance line
Chart By TradingView
Cryptocurrency trader @Altcoinsherpa tweeted a chart of SNX, which shows that the token has decreased by 87% since its all-time high price.
SNX Movement
Source: Twitter

Potential reversal

A closer look at the daily chart shows that SNX has broken down from the $7.20 area and validated it as resistance afterwards (red icon). Previously, the area had acted as support since July 2021. Despite the drop, both the RSI and MACD have generated very significant bullish divergences. These divergences preceded the breakout from the short-term descending resistance line. Due to the fact that they developed over a significant period of time, it is possible that the upward movement as a result of the divergences has not yet ended. However, until SNX manages to reclaim both the horizontal area and the descending resistance line, the trend cannot be considered bullish.
Descending resistance
Chart By TradingView
In the short-term, SNX is trying to reclaim the $4.50 horizontal support area, which is also the 0.618 Fib retracement support level. Similarly to the daily time-frame, the two-hour MACD has generated bullish divergence. A successful reclaim of this area would support the possibility that the downward movement has come to an end. If so, the most likely path would suggest an increase towards the long-term descending resistance line at $10.
Chart By TradingView
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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.

Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for...