After that over-valuation a couple of weeks ago, we saw prices doing the inevitable. It trickled down and in the processed wiped more that 60% of the previous rally.
But, all this was necessary and actually presented a wonderful opportunity for buyers to load up this coin at a discount. Talk of averaging down in its classic mode.
Technically, the reaction at the middle BB has been noteworthy. Notice that not only was the middle BB important but $14 which was actually the main support line in previous analysis flashing with the middle BB and the 1st Fibonacci extension level.
In the sessions to come, if bears are suppressed and starved off of momentum then it is likely that LSK prices might actually be confined within the $14 and $23 for the better part of this week. It doesn’t matter what happens but what we need to see is a bullish candlestick closing above last week’s close.
Prices are back in range in the daily chart and what is important is where buyers picked up from. It is easy to see the double bar bullish reversal pattern with lows of $14 and buoyed by February 6’s bullish closing below the lower BB.
That is an under-valuation and like what happened to that over-valuation back in January, prices are moving back towards equilibrium.
However, while at it, coincidentally, buyers are rejecting further depreciation and are reversing at August 2017 previous resistance now support at $14. Obviously, yesterday’s buy pressure has been confirmed and all that we are waiting to see is if there will be enough bull momentum for prices to push and drive prices above the middle BB.
What is important for us-knowing that we are on the early stages of a potential reversal, is how prices reacts at around $26 on the upside and if they will maintain prices above the middle BB which as we have see was broken on February 7.
It’s a break out trade inside a consolidation which we prefer to stay out off until after we have clear signals.