GNT is beginning to consolidate inside a second triangle pattern after breaking out bullish last month alongside the project’s new Brass beta launch.
In this new triangle pattern however, we can see some discrepancies in the current price activity which makes it difficult to plot whether the asset will continue its overall uptrend or whether we could see some stalling from a temporary bearish reversal.
Below are a few variations of what we could expect to see play out from this triangle pattern, over the next few weeks.
Bullish Continuations
Idea 1
In this first idea we can see two connected triangle patterns within GNT’s price action over 30min candles. The first bullish pennant triangle lies well along the general uptrending support line (orange dotted line) and broke out strongly from the 0.618 fib level after consolidating.
This new second triangle appears to be more of a descending triangle pattern with a strong support along the 7,770 Sats level and progressively decreasing highs.
This particular pattern is typically a bearish reversal signal that demonstrates how selling pressure is increasing against each bullish peak over time. Depending on market sentiment at the time however, sometimes these patterns can prove bullish.
Below the second white triangle we can see a green channel between the triangle support and a strong supporting/resisting level below at 7,490 Sats, where the discrepant price action temporarily dipped into before surging back up to the downtrending resistance.
While that movement works against a traditional descending triangle pattern, we can see that the price was able to quickly recover; which allows us to assume that this area could act as a strong secondary support again if GNT experiences a second dip during the continuing uptrend.
The red area beneath this channel to 6,970 Sats, is our selling area. A dip into this channel could be an early indication that the overall uptrend has failed and begun to reverse.
It’s worth noting that both the green channel resistance and the lower red area support lines fall along key fibonacci levels, 0.382 and 0.5 respectively. These will be crucial areas to watch when monitoring Golem’s performance and the development of this pattern.
Price Targets
I imagine that we will see some further oscillation between the lower triangle support and the softer interior resistance at 6,460 Sats, before the price action breaks outside of the sloping resistance.
The first price target will be the 0.236 fib level at 8,738 Sats to give a return of 12.46% off the 7,770 Sat support.
The second target will be set at the higher interior resistance at 9,320 Sats, after we see the price rebound from a brief throwback to the descending triangle resistance level. This will give us a 19.95% return from the 7,770 support.
Idea 2
The second continuation idea is a bullish pennant that connects the discrepant price dip with the current dipping price action to form an uptrending line from these lower lows. Inside this pennant is a softer resisting downtrend line (light blue) where we could see an earlier consolidation play out.
Bullish pennant patterns usually represent much stronger buying sentiment for an asset than the variation of the pattern above. With this in mind, we would hope to see a retracement back to the 0.0 fib level at 10,300 Sats - a 32.56% gain from the base support.
Bearish Reversal
In this last idea, we can see the potential bearish downside to this descending pattern.
Traditionally this is what we would expect to see from this sort of price activity as bull traders tire against the mounting selling force in the market.
Over time we would expect the candles to consolidate against the 7,770 support with further decreasing highs before finally breaking bearish under the pressure.
As it was mentioned before, we could expect some secondary support to come from the lower green area which may allow GNT time to retest the 7,770 level again. Once it fails to test this level we would anticipate buying confidence to depart and the price to plummet further.
Our first bearish target would be at the 0.5 fib level at 6,990 Sats, to deal a loss of -10.04% from the base support.
The second bearish target would be at the 0.618 fib level at 6,209 Sats to deal a loss of -20.09%.
So Which Way Will It Go?
Things aren’t looking too bad for GNT in the current market. Short-term momentum appears to be picking back up again for the asset but it still continues to consolidate inside the descending pattern.
RSI is giving starting to move back into the centre of the channel and MACD looks like it’s beginning to converge back towards the signal line.
Looking at the Ichimoku indicator we can see a resisting cloud projected ahead of the asset and a bearish divergence between the Tenkan and Kijun Sen lines, which further supports the current descending pattern.
We can also see a little bearish movement with the 50 EMA (blue) starting to diverge with the 200 EMA (red), but this could just be a brief dip in bullish confidence as the price hovers around the key 0.382 fib support.
In this situation, it will be imperative to wait for the candles to hold well at whichever level they move off to before entering into this trade.
Despite the possibility of a bear market, no one can ignore the strong uptrend GNT has been enjoying over the past month. Having only recently released their Beta product, this project still has plenty more to offer us over the course of this year.
This article appeared first on Cryptovest
