- Swipe price adhering to short-term moving average on a closing basis.
- Declining network growth is a weight on any sustainable bid.
- Cup-with-handle breakout failure has morphed into a bearish outlook.
Swipe (SXP) price from the December 2020 low until the February high accelerated with increased trader commitment and emotion. The altcoin did print a marginal new high in March, but with a bearish momentum divergence on the Relative Strength Index (RSI) and a lack of volume. As a result, traders now need to be mindful that an ascending wedge pattern could be developing.
Swipe price needs to touch the upper trendline one more time
Ascending wedges can be a topping pattern, especially when following a climax move. It is associated with either a failure to test the highs or exceeds the highs by a small percentage before reversing. In these cases, the result is that the breakout will turn downward because the commitment of traders was drained at the peak, highlighted by weak underlying volume numbers. Thus, it is a reversal pattern.
SXP is one more marginal high away from confirming the pattern. The 10 three-day simple moving average (SMA) is the first significant support, currently at $3.23, followed closely by the quickly rising lower trendline at $3.06. If the pattern triggers, traders should label the March 25 low at $2.54 as the next tradable low.
More extensive support unfolds at the 0.50 retracement level of the December-February rally at $2.30 and then the 0.618 Fibonacci retracement level at $1.89.
SXP/USD 3-day chart
A breakout above the upper trendline at $4.31 may signal a test of the all-time high at $5.145, but it will require a spike in commitment. A successful rally into new highs may have the energy for a rally to the 1.382 extension level at $6.90 and possibly the 1.618 extension level at $7.98.
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