WAVES risks ‘death cross’ plunge after price rallies 88% in six days

189
SHARES
1.5k
VIEWS

A major rally in WAVES prices this week saw almost double risk faltering due to the “Death Cross” technical pattern in the coming sessions.

WAVES Price Drops 85% After ‘Death Cross’ in 2018

The death cross measurement appears when an asset’s long-term moving average closes above its short-term moving average.

READ ALSO

Specifically, on the weekly chart of WAVES, its 50-Week Exponential Moving Average (50-Week EMA; Red Wave) is outperforming its 20-Week Exponential Moving Average (20-Week EMA; Green Wave) for the week ended February. jumped over. 21 – A bearish crossover.

The WAVES/USD weekly price chart is characterized by a ‘death cross’. Source: TradingView

This is WAVES’ first “Death Cross” event on the weekly charts since June 2018. In both cases, a massive rally followed by a sell-off in the broader crypto market led to a correction in the WAVES market.

As it happened, WAVES fell as much as 85% following the 2018 death cross formation, despite closing above both its 20-week and 50-week EMAs in impressive but fake bullish rebound moves.

Therefore, Waves’ latest upside retracement, although its best weekly performance since April 2018, is still at risk of a long-term bearish break. As a result, prices below the 20-week and 50-week EMAs could initiate another selloff in the market.

The Waves Sell Level

In short, WAVES, the native token of the blockchain platform of the same name, rose by 88% during the weekend to reach over $21 per week.

As previously covered by Cointelegraph, the migration to Waves 2.0, a partnership with interoperable blockchain service provider Allbridge, and the upcoming $150 million fund to fuel the development of Waves in the US acted as tailwinds for the Waves upside boom. does.

RELATED: 3 Reasons why Waves’ price surged over 100% in the past week

But there are signs of correction as WAVES fell 10% this Saturday from its local top near $21.

Interestingly, the inflection point coincides with the 1.00 Fibonacci line of the Fibonacci retracement graph, forming a 21.60-swing high to 0.54-swing low, which acted as key resistance during the January 2018, April 2021 and November 2021 corrections. Works in – as shown in the diagram below.

The WAVES/USD weekly price chart is showing its ‘Important Resistance’. Source: TradingView

For example, in April 2021 and November 2021, bulls attempted to rally to $21.60 as support but were unsuccessful. As a result, WAVES has spent most of its time below the 1.00 Fib level than above it, which suggests a volatile upward sentiment around it.

The Fibonacci fractal is showing that WAVES needs to undergo a pullback move towards its next support line near $17, $13.50, and $11. Conversely, the bulls may retest the $34.50 level in a decisive move above $21.60.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.