January 27, 2023

The price of Elrond (EGLD) has created a long term bullish pattern but is trading within a short term bearish pattern. The direction of the trend can be determined by which pattern resolves first.

The EGLD price has fallen below a descending resistance line since Aug. 15. The line caused a rejection on November 3 (red icon), creating a long upper wick and leading to a low of $39.43 on November 22.

The downward move also caused a breakdown of the horizontal support area at $45.30, which has now turned into resistance (black icon).

Despite the fact that EGLD price is trading below resistance, there are also several bullish signals.

Firstly, the Elrond price has created a double bottom compared to the price on June 13 (green icons). The double bottom is considered a bullish pattern.

More importantly, the daily RSI generated bullish divergence (green line) and moved above 50. Both are considered bullish signals.

Therefore, the technical analysis of the daily time frame suggests that Elrond price will manage to move above the $45.30 area.

Elrond Price short-term breakout

The six-hour chart shows that the Elrond price has moved up since Nov. 21 within a possible ascending parallel channel. Such channels are considered corrective patterns, which means that their eventual failure is likely. However, the resistance line of the channel has not been sufficiently validated.

On December 5, EGLD price broke out of the horizontal resistance area at $44.30 and then validated it as support for the next 24 hours. Today’s Elrond price is $45.17, just below the midpoint of the channel. If the breakout continues, the next closest resistance is $48, which also coincides with the channel’s resistance line.

A breakout of the latter would also confirm the long-term double bottom pattern leading to a rise to $51.66-$54.56.

On the other hand, a channel breakdown would invalidate the long-term double bottom pattern and could lead to a new annual low.

For BeInCrypto’s latest crypto market analysis, click here.

Disclaimer: BeInCrypto strives to provide accurate and up-to-date news and information, but it is not responsible for missing facts or inaccurate information. You agree and understand that you use this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

disclaimer

BeinCrypto strives to provide accurate and up-to-date information, but is not responsible for missing facts or inaccurate information. You agree and understand that you use this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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