1INCH bogged down – What future for the little prince of Decentralized Finance?
The previous week was eventful, the majority of the market went down, returning to levels that we had not seen for several weeks! A big week begins again. Over the next few days, we will have to watch the publication of certain major economic data as well as the FED’s decision on interest rates. Today, let’s analyze the 1INCH cryptocurrency, a token of the famous decentralized protocol on the Ethereum blockchain. The objective is to take stock of his situation and the scenarios that we can envisage.
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1INCH in a downtrend on 3D time unit
When we analyze the price of the asset, we can notice that since November 2021, after an unsuccessful attempt to list a new all time high, 1INCH is in a downtrend. The cryptocurrency lost the $3.55 zone, an important local support that was confluent with the MA100.
Since this bearish breakout, 1INCH has never stopped losing the supports it had registered in the short term. On several occasions, he was rejected on the three EMA 13/25/32. Now, the asset is moving in a range with an upper limit at $0.809 and a good low at $0.553.
During the month of August, there was a failed attempt to exit the range from above. Above this upper limit is a resistance at 0.882 dollar (black line on which the price was blocked). In addition, we note the presence in confluence of the three EMAs on which 1INCH has been rejected for several months. It is a key level. However, the price quickly re-entered the range, so a deviation took place. This is a false breakout to outflank breakout traders and recoup some of the liquidity from the shorts.
What is the evolution of the price within the range?
To produce a more precise analysis, we now find ourselves on a daily scale using the volume profile, a very interesting indicator which makes it possible to determine the zones where the volume traded is significant. A very relevant environment to identify key areas.
You can see that within the range there is a major level that catches our attention. It is the area of 0.645-0.688 dollar which includes a confluence of technical levels. It consists of the Fibonacci 50% of the range, the EMA25 and 32 as well as the MA100 just above. In addition, the POC is also located, this is the area where the volume traded is the greatest (thin red line).
To hope for a return of the price to the upper limit of the range which is in confluence with the Value Area High1INCH should imperatively break free from these technical levels. At the moment the trend is down, there is price acceptance below the volume profile POC. Yesterday, the asset registered a wick below the lower limit of the range to recover liquidity. It is not impossible to have a return of the price to the minimum at 0.645 dollars. However, pay attention to the Value Area Low which is just above.
If the price does not manage to overcome it and it breaks down the range in which it is moving, 1INCH will probably revisit its low point at $0.514. This could be the trigger for a new bearish run. For the moment, we are not there yet, although we must keep a bearish bias.
1INCH is in a bad position against Bitcoin
Facing the king of cryptocurrencies, we can see that 1INCH is moving in a range while holding under oblique resistance. Recently, the confluence of EMA 13/25/32 and the Fibonacci 50% of the April-June bearish move was lost on the downside. Thus, 1INCH is in a downtrend within the range itself. In parallel, Bitcoin continues to regain dominance. So, although the asset has rebounded on its local support, is it not too weakened? Could this be a sign of a new bearish move to come? What is certain is that this token is underperforming against the king of cryptocurrencies.
Here we are at the end of this analysis of 1INCH, you can see that times are tough, whether against the dollar or Bitcoin. Against the latter, the asset is underperforming, which leads us to limit bullish targets against the dollar. This is because if Bitcoin is pushing higher, an underperforming asset is more likely to be down in the market. Especially since in the event of a decline in Bitcoin, that of the altcoin may be much more violent. For the moment, nothing is decided yet as long as we are in the range. If you want to play the rebound on the lower limit, make sure you have good risk management. Remember that this week will be important and high in volatility in the financial markets.
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