Thorchain was one of the top gainers during the previous intraday session. It broke above another very important resistance and made an attempt at another one.
The coin kicked off trading at $1.27 but experienced a strong push in buying volume that shot prices up. It tried flipping the $1.40 resistance and succeeded as it attempted $1.50 next. However, it failed as it saw strong rejections at $1.48. Afterward, it retraced and dropped to a close at $1.37 which signified a more than 8% increase in value.
The asset crossed $1.40 again during the current intraday session. It pushed for another go at $1.50 but failed as it experienced a retracement from $1.45. As per data from Coinstats, the trial at the highlighted mark took place at in the early hours of the day. Following the failed attempt, it retraced to a low of $1.35.
Currently, up by almost 3%, fears of a massive correction are growing. Are they justified? Let’s look at some factors
Previous Trends
During the previous 24-hour session, the altcoin made an attempt at a critical barrier but failed. A similar event took place in the early hours of the day, RUNE tried breaking through the same barrier but failed. Additionally, it recorded a lower high compared to its previous. This trend closely resembles one with several appearances on the charts. The figure below offers more insight into this pattern.
The image above shows several eclipses over a few candles. However, these red circles highlight a critical price trend on the chart. In each of these patterns, the coin tried flipping a key resistance but failed. After the failed attempt, it registered a lower high during the second intraday session.
Following this event, thorchain lost a significant fraction of its value. With reference to the image above it is worth noting that the correction or downtrend is almost inevitable. If this holds true, the same situation may play out in the coming days. On each occasion, the asset lost a minimum of 10%.
Thorchain is Overbought
Aside from previous price movements, another clear indication of an impending downtrend are indicators. The moving average convergence-divergence keeps soaring and has broken several barriers, inching closer to 0.12. Additionally, the 12-day EMA is showing no signs of retracement.
The 200-day and 50-day moving averages are also displaying bullish signs. For the 200-day it arched downward and going closer to its counterpart. The 50-day is climbing which may result in a Golden Cross in the coming days. The distance between both metrics is an indication that these events will happen within the next 2 months if market conditions remain constant.
Both indicators mentioned above are bullish and depict long-term situations. However, the relative strength index is blaring warnings. It is pointing to a gradual decrease in buying volume. If this trend continues, thorchain may experience a gradual or sudden decline in price.
A huge correction could send the altcoin to as low as $1.30. Let’s see how prices play out.
