Key Holo Outlook
- Holo (HOT) was firm on Tuesday even as the rest of the cryptocurrency market logged massive gains.
- The cryptocurrency now tests its 20-day moving average as support.
- A rebound to the upside looks likely.
Yerevan (CoinChapter.com) — Holo prices dropped in the early New York trading session as traders’ focus shifted towards top cryptocurrencies, including Bitcoin and XRP, both of which logged massive upside rallies in the previous 24 hours.
That Green Wave
The HOT/USD exchange rate fell by a modest 0.47 percent to $0.0187. Its drop came as a part of a broader downside correction that started after HOT topped at $0.0316. Before that, the token had rallied 5,347 percent on a year-to-date timeframe. Naturally, the loft valuations prompted many traders to secure profits. As a result, the Holo token dropped lower by as much as 45 percent from its all-time high.
The price started stabilizing near its 20-day moving average (the green wave in the chart above). As CoinChapter.com has earlier suggested, the 20-DMA provides a backstop for Holo bulls to recharge their batteries. Since the beginning of this year, they have held onto the 20-DMA support tightly while maintaining their uptrend. The fractal pattern came accurate even this time.
Based on recent history, the HOT/USD exchange rate should rebound from the 20-DMA wave. As it happens, the pair’s next upside targets will be as the ones shown in the chart below — based on Fibonacci retracement levels made between the correction swing highs and lows.
For blind homies, the lowest level on the latest Fib retracement graph above is $0.0170. The Holo token now trades just above it, looking to break above the 23.6 Fib level of $0.0204. Historically, the price has kept climbing over one Fib level after another. So, medium-term, the HOT/USD rates are looking to retest their previous top near $0.0316.
On the other hand, the pair trades lower inside a Falling Wedge pattern (the area between the two descending trendlines in black). Technically, Holo should continue moving lower until it reaches the Wedge’s apex — the point of convergence between the upper and lower trendlines. And since Falling Wedges are bullish reversal patterns, Holo should break out to the upside, targeting its previous high of $0.0316.
A breakdown below the Falling Wedge pattern invalidates the bullish analogy completely. It is advisable to place stop losses at appropriate places to minimize risks.