• ZIL’s uptrend momentum weakened. 
  • Open Interest rates and sentiment declined, further reinforcing a possible reversal. 

Zilliqa’s [ZIL] increasing divergence amongst key technical indicators could impact investors and traders, not counting the 90% gains ZIL posted in its most recent rally. 

The formation of an ascending channel pattern captured ZIL’s recent rally. Notably, the uptrend saw a massive boost from rising buying power, as evidenced by the rising volumes (uptick in OBV). 

However, the surging price action was also marked by a declining Relative Strength Index (RSI), forming a price/RSI divergence. The divergence could suggest a likely reversal, which could target the $0.02504 support level – a 10% plunge. So far, the 26 and 200-period EMAs (exponential moving averages) have been keeping extended drops in check. 

But a convincing break above the channel would leverage bulls to reclaim the pre-November level of $0.03345. Such an upswing would invalidate the bias described above. 

Regardless, such an upswing may be difficult because of the weakening uptrend momentum, as shown by the Average Directional Index (ADX). The ADX has been making lower highs since mid-January, suggesting the uptrend weakened. 

ZIL has seen an increase in demand since January, as evidenced by a positive Funding Rate in the same period. However, the asset’s weighted sentiment turned negative at press time. Moreover, waning investors’ confidence could undermine ZIL’s uptrend further. 

In addition, ZIL’s open interest (OI) rate has been declining since January 10, despite the increasing prices. Therefore, more money flowed out of ZIL’s futures market, which undermined a strong uptrend momentum. 

Moreover, the increasing price/OI divergence could signal a possible trend change. Therefore, investors and traders should be cautious with their moves, as the press time ZIL market structure could be a potential “bull trap.”

  • A level of support with a pocket of liquidity at $18 meant Avalanche retained strong support despite recent selling.
  • A Bitcoin crash beneath $22.3k could make buying Avalanche risky.

Bitcoin [BTC] fell beneath the $23k mark over the past few hours of trading. At the time of writing, much of the crypto market stood in the red for the day. Avalanche [AVAX] also noted losses during the day’s trading. The asset fell from $20.24 to stand at $19.73, a loss of 2.5%.

Higher timeframe analysis showed that Avalanche could be set for a dip toward $18.7 and the $17.8 levels. Bullish traders can wait for a bounce and a lower timeframe bullish market structure before looking for entries to long positions.

Higher timeframe bulls can wait for AVAX to drop into an area of interest

The market structure of Avalanche remained bullish on the one-day timeframe. To the south, below $19, it has a higher timeframe level of significance at $18.6. The zone from $17.5-$18.6 represented a pocket of liquidity.

In mid-January, many candlewicks in this zone were rejected on lower timeframes. This meant that, at that time, sellers were dominant in this zone. When the $18.6 level was breached in late January 2023, it signified bullish dominance. Hence, a retracement into this pocket of liquidity would likely see strong buyers.

Further south, AVAX has a level of support at $16.8 and at $15.77. A daily session close beneath $15.77 will flip the structure to bearish. Until then, buyers can look to bid at important support levels, although it could be risky.

The RSI was falling toward neutral 50 to show bullish momentum was waning. In contrast, the OBV was rising to show buying pressure.

Open Interest spiked upward on 28 January. Since then, it has made a series of lows. During the same period, AVAX reached $21.6 and pushed higher to reach $22.75. By this time, the OI had already weakened, not to mention the bearish divergence the RSI made with the price.

The funding rate remained positive, which suggested market participants were bullishly positioned and have not yet flipped strongly. Overall, buyers looking to hold AVAX for a few weeks before selling can wait for a bullish reaction across the market before buying, and cut their losses to a drop below $15.7.

  • Solana faced a sharp rejection at the range highs.
  • A fall beneath $23.5 signified that another fall of 12% could follow.

Solana [SOL] performed extremely well in January when it recovered from $8 to reach $24 within weeks. In February, this bullish momentum stalled beneath a higher timeframe area of resistance at $27.

SOL could not break out past $26 in the past two weeks. Bitcoin [BTC] also slid beneath the $23k level but found some buyers at the $22.4k mark. If BTC falls beneath $22.3k, it could drag many altcoins to lower prices.

A high-volume node and the mid-range present resistance to SOL

The Visible Range Volume Profile showed that the Point of Control (red) lay at $24.3. The price was trading beneath this point, which meant that SOL bulls could face significant resistance at this point in the coming days.

The mid-point of Solana’s range from mid-January also lay at $23.53, close to the high-volume node. Therefore, the inference was that the entire zone from $23.5-$24.3 presented stern resistance to the buyers.

A good risk-to-reward trade would be to buy SOL on a bullish reaction at the range lows at $20.47. A bullish engulfing pattern, or a bullish market structure break on the four-hour chart, could tip buyers of a shift in momentum.

On 2 February, Solana retested the $26 level as resistance and saw a sharp rejection. The one-hour OI chart on 1 February showed a gradual move upward on the OI. This was followed by a sharp downward turn on 2 February.

In the past few days, one-hour trading sessions saw many more long positions (red) liquidated than short positions. Earlier on the day of writing, close to $1 million worth of long SOL positions were liquidated as the price fell below the $23 mark. Combined with the falling OI, the inference was discouraged longs and rising bearish sentiment.

  • GRT recorded a sharp drop as bears took control of the market. 
  • Short-term sell pressure was still high at press time. 

The Graph [GRT] hit a crucial support level, but the prevailing sell pressure could undermine a strong recovery. GRT faced price rejection at $0.2321, ushering in bears. So far, GRT has fallen by over 25%, from $0.2321 to $0.1674. 

At press time, GRT traded at $0.1761 and exhibited a mild bullish momentum which could stifle given the low trading volumes and increasing short-term sell pressure.

The recent drop hit the $0.1674 level but found a temporary hold at the 50% Fibonacci level of $0.1723. At press time, the decline in trading volumes weakened buying pressure and the market structure. 

Therefore, GRT could oscillate between 50% ($0.1723) and 61.8% ($0.1864) Fib levels in the next few hours. However, bulls must deal with the hurdle at $0.1776. 

Notably, the Relative Strength Index (RSI) retreated but was still bullish at 57 units. But the Chaikin Money Flow (CMF) exhibited a sideways movement above the zero line, showing a battered but steady market that could enter a price consolidation. 

Alternatively, the trading volumes could decline further, tipping bears to break below the 50% Fib level. Such a move would invalidate the bias described above. The downtrend could be kept in check by $0.1674, 38.2% or 23.60% Fib levels. 

As per Santiment, GRT saw a sharp drop in weighted sentiment, indicating waning confidence in the asset by investors. Nevertheless, the sentiment remained positive, further reiterating that GRT weakened but could attempt a recovery. 

However, the recovery could be weak because of the short-term sell pressure witnessed at press time. Notably, GRT recorded a spike in supply on exchanges, indicating that more tokens were moved to exchanges for offloading, painting a short-term sell pressure. 

On the other hand, Supply outside of exchanges declined, showing little demand for GRT at press time. As such, GRT’s possible recovery could be limited with a possibility of sideways trading. But a strong bullish or bearish BTC would invalidate the above bias as GRT will adopt a definite price direction based on the king coin’s movement. 

  • APT’s momentum waned. 
  • Several obstacles blocked the bulls’ leverage. 

Aptos [APT] flashed green for the better part of January 2023, but 1 – 8 February was unsettling, as APT shrunk by 7%. Compared to its January rally, APT posted over 300% gains after rising from $3.4 to $20.   

 At press time, APT secured a support level but faced price rejection at a crucial resistance level. The recovery could continue if the support holds in the next few hours/days.

APT’s 350% performance faced an initial hurdle at the $20.2745 level. Afterwards, several price rejections at $18.4285 turned it into a critical resistance level. However, bears gained more leverage and devalued APT to below the 61.8% Fib level of $15.2720. 

Although bulls found steady ground at $14.6655, but the support-turned-resistance level of $16.3615 was an immediate hurdle twice. However, bulls could reignite the recovery.

The Relative Strength Index (RSI) was neutral, while the Money Flow Index (MFI) indicated a short-term accumulation trend. If demand for APT increases, bulls could break above the $16.3615 hurdle and target the bearish order block at $18.4285. 

However, a break below the $14.665 support level would invalidate the above bias. The drop could be checked by the 50% Fib level of $13.6959 or the 38.2% Fib level. 

Notably, APT’s trading volume and RSI have dropped significantly since mid-January, lending credence to a continued fall.

However, RSI recovered slightly and rested at the neutral level at press time. An RSI rebound from the neutral level would suggest a building uptrend momentum capable of overcoming the immediate hurdle. 

APT weekly volatility waned, but …

As per Santiment, APT’s weekly volatility registered a sharp drop, followed by a stagnant session before a gentle rise began at the time of writing. It showed that APT’s market dropped in the past week before a price consolidation set in. But still, there was a weak recovery attempt at press time. 

In addition, APT recorded negative sentiment, showing investors’ outlook was bearish on the asset. Therefore, APT’s strong recovery could face headwinds. 

On the other hand, the open interest (OI) rate has been falling but steadied in the past few days. Although it could suggest a possible trend change and likely recovery, investors should also monitor BTC movements for confirmation. A strong recovery could be feasible if BTC reclaimed its $23.5k level, but a drop below $23k would undermine the recovery. 

2023-02-10 04:39