The Synthetix (SNX) price reached a new all-time high on Dec. 26 and is currently in the process of validating the breakout level as support.
Indicators and the wave count suggest that SNX will hold this support and gradually begin moving upwards towards yet another all-time high price.
SNX had been moving downwards since reaching an all-time high of $7.88 on Sept. 1. The decline continued until it reached a low of $2.47 on Nov. 3. Since then, SNX has been moving upwards.
On Dec. 23, SNX broke out above the previous resistance area at $7.40 and proceeded to a new all-time high of $8.77 three days later. While it has fallen since, the decline looks more like a retest of the breakout level than it does of the beginning of a new downward move.
Technical indicators are bullish, supporting the continuation of the upward movement.
Cryptocurrency trader @PostyXBT stated that he is longing the retest of the highs for SNX, expecting higher prices in the future.
Both the retest and the readings from technical indicators suggest that a rally is the most likely scenario.
The shorter-term six-hour chart shows that SNX has been following a parabolic ascending support line since Nov. 26.
While the rate of increase alongside this line is unsustainable in the long-run, it’s possible that SNX continues increasing for a while alongside it.
It has just reached this line and is at a suitable level for a bounce. However, there is some weakness in the form of bearish divergence in the MACD.
Nevertheless, the shorter-term two-hour chart is more bullish. It shows a resistance/support flip at $7.50, also coinciding with the parabolic support line.
Furthermore, the retest reveals two long lower wicks, a sign of buying pressure. The MACD has also begun to gradually turn upwards.
As long as SNX does not break down below this line/area, it is likely to continue moving higher and reach another all-time high in the process.
The most likely wave count suggests that SNX is in an extended wave 3 (shown in white below) which could end near $10.80. The sub-wave count is shown in black.
If correct, SNX is likely in a complex corrective 4th wave pattern, which could be a triangle.
A fall below the sub-wave 1 high at $5.48 would invalidate this particular wave count.
To conclude, the SNX price should hold above the current support area and begin moving upwards, possibly reaching a high near $10.80.
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