Nano (NANO) has been moving downwards since May 13, but bounced once it reached the $4 horizontal support area.
It has broken out from a descending wedge, potentially beginning a corrective retracement phase.
NANO bounces at long-term support
NANO has been moving downwards since May 13, when it reached a high of $17.70. So far, it has reached a low of $3.10, doing so on July 20.
However, NANO has been moving upwards since the June 22 low and has reclaimed the $4 area. This is important since the $4 area is both a horizontal support area and the 0.786 Fib retracement support level.
Despite the bounce, technical indicators in the weekly time-frame are still bearish. The RSI has fallen below 50, the Stochastic oscillator has made a bearish cross and the MACD is decreasing, approaching negative territory.
Future movement
The daily chart provides a more bullish outlook.
NANO has broken out from a descending wedge, which is considered a bullish pattern. In addition to this, the RSI has moved above 50, the Stochastic oscillator has made a bullish cross and the MACD is moving upwards.
The main resistances are at $6.86 and $9.26.
The shorter-term six-hour chart shows that NANO is trading inside an ascending parallel channel. The upward movement is gradual and choppy, thus it is likely to be corrective.
Furthermore, both the MACD & RSI have generated bearish divergences. Therefore, a breakdown from the channel is likely.
If one occurs, the main support area would be between $3.68 – $3.86, the 0.5-0.618 Fib retracement support levels.
Wave count
Cryptocurrency trader @Mesawine1 outlined a NANO chart, stating that the token is completing an A-B-C corrective structure.
It is possible that NANO has completed a bullish impulse and is now in the B wave of an A-B-C corrective structure (orange).
If so, the B wave could potentially continue up until the $9.20 resistance area previously outlined.
While the bottom of the C wave depends on the length of the B one, the $1.20 area is a very strong horizontal support level, which could act as a bottom if it is reached.
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Disclaimer
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Source: https://beincrypto.com/nano-breaks-out-after-bounce-at-long-term-support/
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