In today’s analysis we will be looking at a few altcoins. Under the microscope will be HEX, DOT, and BNB. We will be doing a technical analysis only, disregarding fundamentals.
HEX is showing a valid uptrend as daily candles reach past a previous all time high. The current price action is far away from the dynamic support line, (green uptrend line). Since price has shot through the previous all time high resistance it may be respected now as a support. It is important to observe price action for a retrace to this level as if it is not sustained it could mean lower price action is on the way. Here is what that idea looks like with some explanations.
In the 4 hour time frame and below it becomes increasingly difficult to analyze the market structure as the candlesticks do not take a familiar shape. This is due to low liquidity in the trading pair. Analyzing a smaller time frame in this scenario would take a lot of diligence and may easily go wrong. For the time being it is recommended to analyze the daily time frame for this currency pair and make trading decisions based on strong support or resistance zones.
We can observe on the daily time frame of DOT that price is currently shooting through a wedged price formation. There was a purple line near current price action representing resistance as it had previously been used as support in the past. Price has technically re-entered a valid uptrend indicated by the upward sloping green trend line.
When observing a smaller time frame it is notable that the most recent active downtrend line has been pierced rendering it invalid. Should price action see a retrace its possible to return to a low of $27.49 indicated by the purple line. You can see the initial breakout was to jump the red descending line, then the next pump soared the price above the key resistance level. Rational entries for long positions would be around dynamic support lines. If this uptrend continues strong the next key level of resistance may be around $40.
This coin is showing a different market structure than most other coins. Many coins have found obvious areas of support/resistance yet BNB is showing ranging price conflictions and dynamic support lines throughout. There is a technical valid uptrend indicated by the upward sloping green line labeled dynamic support. There aren’t too many indicators telling us that this should be shorted in the bigger picture.
Breaking the analysis down to the 4 hour time frame allows us to see there is an active downtrend. We can project this downtrend to the bottom of this purple zone somewhere along the lines of dynamic support. If that retest is respected it will be an optimal entry for a swing position. However if there is rejection among that line and we fall below then we can prepare for a possible retrace towards the $350 price region.
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Written by Edward Gonzales © Crypto University 2021