Date: Wed, Jan 01, 2024, 10:28 AM GMT
The cryptocurrency market has entered the new year with continued downward momentum, following a broader correction that started in December. Bitcoin (BTC) has pulled back from its all-time high of $108,000 and is now trading above $93,000.
Amid this bearish trend, the decentralized permanent storage token Arweave (AR) has also faced significant selling pressure, registering a 33% monthly decline and trading at $16.52 at the time of writing.
Source: Coinmarketcap
However, technical indicators suggest that AR may be setting up for a bullish reversal. Prominent crypto chart analyst @JohncyCrypto has highlighted a critical technical setup that could define AR’s price trajectory in the near term.
Key Insights from the Chart
As per analyst, Arweave (AR) is testing the lower boundary of a symmetrical triangle pattern on the daily timeframe, a structure that frequently precedes significant price movement. The $15.00 -$16.50 range is acting as a critical support zone, with a strong bounce from this level potentially setting the stage for bullish momentum.
Source: @JohncyCrypto (X)
If the support holds, $AR could target several key resistance levels:
$22.00: The immediate resistance, signaling the start of upward momentum.
$29.00 and $35.50: Mid-range targets that could attract additional buying pressure.
$46.50: The apex resistance, marking a possible breakout zone into new highs.
Additionally, the 100-day moving average (MA 100) is a key technical indicator to watch. A breakout above this level would confirm a trend reversal and further solidify the bullish outlook. Volume is showing subtle increases, and the RSI (Relative Strength Index) is approaching oversold territory, both of which reinforce the likelihood of a rebound.
Possible Scenarios
Bullish Case: A successful bounce from the current support zone could push AR toward the resistance levels mentioned above. If AR manages to break out above $46.50, it could signal a strong bullish trend and open the door to further upward movement.
Bearish Case: Failure to maintain the $15.00-$16.50 support zone might result in a deeper correction, with AR potentially revisiting lower psychological levels at $13.00.
Conclusion: Could a Bounce Lead to a Breakout?
As Arweave (AR) tests the critical support zone within a symmetrical triangle, the potential for a bounce raises optimism for a bullish breakout. If the current support at $15.00-$16.50 holds, AR could aim for key resistance levels at $22.00, $29.00, $35.50, and ultimately $46.50. A breakout above the upper resistance could signal the start of a new upward trend.
However, failure to maintain this support might lead to further downside, with possible retests of lower levels at $13.00 . Traders should remain cautious and monitor the price action closely, as the coming days could be pivotal for AR's future trajectory.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research and consult a professional advisor before making any investment decisions.
