Most-if not all cryptocurrencies have been on a money wiping spiral with some coins losing up to 80% of their value. Lumens is no exception and while we expect price to recover in the coming days, a series of technical confluences have been formed to assert this projection and that is what we are capitalizing on.
The first got to be the clear double bottoms that formed by week ending January 21 and February 4. Yes, last week lows reversed at key supports. In both instances, notice that prices reversed from $0.30 or previous highs of a minor consolidation that peaked on December 24? Besides this double-bottom that is clear in lower time frames, this is another reversal from previous resistance turned support.
For chartists, what is important in the coming sessions is how prices reacts at $0.30. It will be a relieve if there is a follow through now that prices ended up higher on the last 3 days of the week leading to that long lower wick.
In the daily chart, the general slope of the middle BB is negative and there is a big chance that sellers might follow through as they bust below the 61.8% Fibonacci retracement.
On the flip side, if prices confirm the double bar bull reversal pattern which was not confirmed yesterday, the middle BB will act as our immediate resistance line.
In that case, close above $0.50 or the 50% retracement level might encourage buyers to enter this trade and in line with that, we shall be looking for potential long opportunities in the 4HR chart.
The rapid depreciation on February 1 stopped right at the head of the inverted head and shoulder pattern at $0.30.
After that prices recovered and is now above the main resistance trend line connecting January 6 and 13 highs and what is important for price recovery is bulls maintaining prices above $0.40.
Already there is a 3-bar bull reversal pattern with attempts of a close above the middle BB. I recommend buys with targets at $0.7.