WAVES Falls Back Sharply and Targets Recent Lows

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In Brief
  • WAVES has been rejected by the long-term $7.20 resistance area.

  • Technical indicators on the daily time-frame have turned bearish.

  • The price has broken down from a short-term ascending parallel channel.

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The Waves (WAVES) price has been declining since reaching a high on Nov. 23. Despite an upward move last week, the breakdown from the current short-term pattern suggests the price will head lower.



Rejection From Long-Term Resistance

On Nov. 23, the WAVES price reached a high of $8.86 before dropping sharply. While the high was above the $7.20 long-term resistance area, the price has fallen back below it, solidifying its significance.

While the MACD and Stochastic Oscillator are still increasing, there is a massive bearish divergence that has developed on the weekly RSI, which is often a sign of a trend reversal.



On the weekly time-frame, the closest support area is at $4.

(Note: The logarithmic chart is used in the image below to better visualize large price fluctuations)

WAVES Chart By TradingView

Future Movement

The daily chart for WAVES provides a more bearish outlook.

First, we can note several long upper wicks during the recent highs, a sign of selling pressure.

Second, indicators have begun to turn bearish. All three of the RSI, MACD, and Stochastic Oscillators are falling, the latter being very close to making a bearish cross. Furthermore, the RSI has fallen below 70 after forming bearish divergence.

The closest support area is at $4.66, being both the August highs and the 0.618 Fib retracement level of the most recent upward move.

WAVES Chart By TradingView

The shorter-term two-hour chart supports the possibility of a decline since the 0.5 Fib retracement level and the $7.15 resistance area rejected the price, causing a sharp decline afterward.

Furthermore, the price has broken down from a parallel ascending channel, confirming that it’s heading lower.

WAVES Chart By TradingView

Wave Count

Cryptocurrency trader @TheEWguy outlined a WAVES chart, stating that the price is in an extended upward move and will eventually reach highs above $15.

Source: Twitter

While it’s possible that the longer-term count and movement will take the price above $15, the short-term count suggests that another decrease is in store.

The price seems to have completed a bullish impulse (shown in orange below) and is now inside an A-B-C corrective structure (orange). The breakdown from the channel also supports the structure as a B wave.

If the A:C waves have a 1:1 ratio, the WAVES price would fall all the way to $4.31, only slightly below the previously outlined $4.66 support area, thus providing confluence for the potential bottom.

WAVES Chart By TradingView

Conclusion

To conclude, the WAVES price is likely to move downwards towards $4.66 before potentially beginning yet another upward movement.

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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

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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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