THETA — Volume Needed To Tackle Upcoming Resistances (And Propel Us To A 30% Trade Potential)!
THETA found its local bottom between $1.20 and $1.25 and bounced nicely from it. Despite the recent positive performance, I don't consider THETA an asset to trade yet.
Here's why:
1️⃣ THETA is still trapped in its downtrend that started in March. All attempts to break out have been unsuccessful. Just yesterday, THETA made a fresh attempt that was rejected immediately. As long as THETA trades below this trendline, I don't consider a long entry.
2️⃣ Moreover, THETA trades below the EMA200. If you follow my content, you already know that I consider this indicator crucial. It can be overruled by bullish momentum, but I don't see this in terms of THETA.
3️⃣ Once THETA breaks out of the downtrend and jumps above the EMA200, it faces a major resistance zone (1.80-1.85) immediately before it gets some room to breathe.
4️⃣ THETA shows a mixed bag of technical indicators. Since many momentum indicators show oversold signals due to the recent price increase, one can doubt that the above-mentioned resistance will be immediately smashed.
5️⃣ On higher timeframes, THETA has no valid trade signals (neither bullish nor bearish). On lower timeframes (4H, 1H), THETA printed some bearish signals. However, I wouldn't overestimate these signals.
💡What-If!
Given that THETA manages to 1) break out of the downtrend, 2) jump above the EMA200, and 3) smash the resistance (optimally second by some bullish trade signals), I will consider a long trade. Since the next bigger resistance sits at $2.50, the trade's first profit target would have a potential of 30%.
🥊 The Challenge
As promising and intriguing the above What-If scenario sounds I see one major hurdle: Volume. THETA's trade volume has been constantly decreasing since the spike in March. Even during times when the market saw considerable pump THETA's volume remained at a low level. In order to tackle the above resistances THETA requires a volume push more than anything else.
