Hello traders! We are getting back to the analysis of the cryptocurrencies and will try to share them more often. This is because there might be some strong growth provided by multiple top coins, and the timing seems to be right.
Today let’s observe Ontology vs Bitcoin, which is ONT/BTC cryptocurrency pair on a Daily chart. The overall trend is obviously bearish, as price remains within the long term descending channel. But after reaching the bottom of the channel, the price started to trade within the medium-term ascending channel and currently approached the bottom of it.
While trending up, price broke above the 50 Moving Average, and on the pullback rejected the 50 EMA, which was acting as the support. The Fibonacci retracement indicator was applied to this pullback, in order to determine potential resistance levels. Two of them seem to play a key role, which is 461.8% at BTC 0.00000940 and 527.2% at BTC 0.0000993.
The nearest resistance also corresponds to the 38.2% Fibs applied to the last wave up, where the upper trendline of the descending channel has been rejected previously. The second resistance corresponds to the 88.6% Fibs.
But we also applied Fibs to the February 15 – May 7 downtrend, and the 78.6% retracement level clearly corresponds to the nearest resistance at 0.0000940 area. Based on that we can make a conclusion, that 0.0000936 might be the key level to watch, in case the medium-term uptrend will continue.
In regards to the downside potential, the nearest support is seen at 0.0000643, which is currently being rejected. If daily close will get below 0.0000633, ONT/BTC can be expected to move down to test 0.0000561 support. And only break and close below second support will invalidate bullish scenario and price is can be expected to continue trending down.
Bias: Bullish while above 0.0000561
Potential Support Zone: 0.0000640 – 0.0000600
Potential Targets: 0.0000936, 0.0000993
Have a profitable trading!