The Wanchain (WAN) price has been retracing since a massive upward movement on Nov. 28 caused a 160% increase. Whether it holds above the $0.20 support area or breaks down will determine the direction of the future trend.
The WAN price decreased below a descending resistance line since July 3. The line rejected WAN on Nov. 8 and led to a new yearly low of $0.130 on Nov. 22.
Afterward, the Wanchain price initiated a very sharp upward movement and broke out from the line on Nov. 28. It reached a high of $0.370 the same day. This amounted to a 160% in a single day.
However, the upward movement could not be sustained, and the price created a very long upper wick (red icon), which is considered a sign of selling pressure. The ensuing drop validated the $0.255 area as resistance.
Despite being below resistance, there are no clear bearish signs besides the wick. The RSI has not generated bearish divergence even though it is overbought. As a result, another attempt at breaking out may follow.
Where Will WAN Price Find Support?
The short-term six-hour chart shows that the main horizontal resistance area is at $0.20. The area has been in place since Aug. 26. So, the breakout from the resistance line also caused a breakout from this area. Now, the $0.20 area is expected to provide support.
Another interesting development for the WAN price is the bearish divergence in the six-hour RSI (green line). Such divergences often precede downward movements, as was the case here.
If the WAN price bounces at the $0.20 area and validates it as support, another attempt at breaking out above $0.255 would be expected.
However, if it breaks down and validates the area as resistance, the WAN price could fall to new yearly lows.
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