YEREVAN (CoinChapter.com) — An overnight recovery in Holo prices did little in offsetting its medium-term bearish bias as its native token HOT briefly slipped below a critical support level.
So it appears the ongoing recovery rally surfaced after testing the 50-week simple moving average (50-week SMA; the blue wave in the chart below) near $0.0047. As a result, traders spotted short-term upside opportunities in the HOT/USDT instrument, saving it from undergoing a severe downside correction.
The wave support does not have enough historical evidence to portray itself as a credible accumulation floor.
Nonetheless, its merits borrow plausibility from the Bitcoin weekly charts, wherein traders consider 50-week SMA as a key psychological support level to enter long-term upside bets. In the end, one could call it crypto psychology, knowing that traders who bet on Bitcoin are more likely to apply similar strategies in other tokens when they trade them.
Holo bulls can rely on the analogy, but only until they see strong upside confirmation at HOT/USDT’s 50-week SMA. That is, a wild bullish retracement coupled with a spike in volume. Until then, the wave support would remain the line of defense, which could cause havoc on the Holo market if broken to the downside.
That daily Holo chart
The daily timeframe chart in the Holo market suggests a downside scenario in the coming sessions. So it seems, the HOT/USDT exchange rate has been trending lower inside a falling channel pattern, prompting traders to open short positions towards the lower trendline on a pullback from the upper one, and to place long positions towards the upper trendline on a bounce from the lower one.
The strategy has worked out fine so far, giving daytraders decent short-term opportunities. Therefore, as HOT/USDT trades near the upper trendline, the potential of another sharp pullback towards the lower trendline looks likely.
Should it happen, the next downside target appeared near $0.0034. The level has earlier served as the resistance during the February-March 2021 trading session. Meanwhile, it also coincides with the falling channel’s lower trendline. An extended sell-off, on the other hand, could have traders extend their profit target to $0.0024.
All the best, folks!