The WAVES increased by 190% over 30 May – 1 June, but has since been slowly retreating.
WAVES has been declining since reaching an all-time high of $63.88 on March 31. The downside movement reached a low of $4.13 on May 29. This is a drop of 88% from the all-time high.
The price has since bounced back, reaching a high of $11.60 on June 1.
However, the ensuing rejection and the long upper wick validated the $8.60 area as support. This is an important horizontal level as it has acted as both resistance and support intermittently since December 2020.
Despite this bearish signal, the weekly RSI is forming a bullish divergence since the beginning of the year (green line).
Therefore, while price action remains bearish, the weekly RSI readings suggest that a bullish trend reversal may be near.
The daily chart shows that WAVES broke a descending resistance line on May 30, leading to the current upward move.
While the breakout also caused a sharp rise in the RSI, the indicator has now fallen below 50, a level that is considered a range for a bullish/bearish trend.
However, the two-hour chart is showing that the price is trading inside a descending wedge. This is considered a bullish pattern, which means that an eventual breakout would be expected.
wave count analysis
cryptocurrency trader @PrinceofElliott Tweeted a chart from WAVES, which states that the token ABC is completing a corrective formation.
Since the rise starting May 30 is a five-wave upward movement, it can be labeled as wave A of the ABC corrective structure.
In this probability, the upcoming retracement is part of wave B. Price is trading within the 0.5-0.618 Fibonacci retracement support levels, which is likely to end with B wave.
If true, an upcoming breakout will take the price to either $12 or $14.70, giving a waveform A:C 1:1 or 1:0.618 ratio.
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