WAVES’ massive price hike this week, which nearly doubled, risks faltering in upcoming sessions due to a faltering technical pattern.
WAVES Price Dropped 85% After ‘Death Cross’ in 2018
A dead cross is displayed when an asset’s long-term moving average closes above its short-term moving average.
In particular, on the weekly WAVES chart, the 50-week EMA (50-week EMA; red wave) jumped above the 20-week EMA (20-week EMA) green wave) in the week ending in February. The number 21 is a bearish cross.
The weekly price chart of WAVES/USD shows a “death cross”. Source: Trading View
This is WAVES’ first “death cross” on the weekly chart since June 2018. Either way, the correction in the WAVES market was due to a sell-off in the broader crypto market after a massive bull run.
As it happens, WAVES is down 85% after forming a death cross in 2018, despite closing briefly over 20 weeks and 50 weeks in impressive but false bullish bounces.
Thus, the recent bullish correction in WAVES, although showing the best results in a week since April 2018, is still subject to long-term downside risks. As a result, a drop below the 20-week and 50-week exponential moving averages could trigger a new round of sales in the market.
Sales Level WAVES
As a reminder, WAVES, the original token for the blockchain platform of the same name, has grown by up to 88% since the start of the week, reaching more than $21 apiece over the weekend.
As previously reported by Cointelegraph, the move to Waves 2.0, a partnership with interoperable blockchain service provider Allbridge, and an upcoming $150 million fund to accelerate Wave’s growth in the US have been a tailwind for WAVES’ growth boom.
Related: 3 Reasons Why Waves Has Increased 100% in the Last Week
But there are signs of a correction as WAVES is down nearly 10% from a local high near $21 on Saturday.
Interestingly, the inflection point coincides with the 1.00 Fibonacci line on the Fibonacci retracement chart drawn from the 21.60 swing high to the 0.54 swing low, which served as a major resistance during January 2018, April 2021 and November 2021, as shown in g. Graph. The chart is below.
WAVES/USD weekly price chart is showing “Critical Resistance”. Source: Trading View
For example, in April 2021 and November 2021, the bulls attempted to reverse the $21.60 support level, but failed. As a result, WAVES has spent most of its time below the Fibonacci level set at 1.00 more than above it, indicating an unstable uptrend around it.
The Fibonacci fractal suggests that WAVES will revert to its next guide line near $17, $13.50 and $11. Conversely, a decisive move above $21.60 may lead to a retest of the bulls above $34.50.