$BAL Analysis

Another week without significant changes in the long term analysis of the crypto market’s largest capitalization assets, with both $BTC and $ETH approaching the close with a result around -1.5%. Low volatility in this market given the situation of indecision in which we find ourselves involved in that support zone.

We see a clear example of this situation in $BTC, which despite testing the resistance zone at the beginning of the week, rejected in search of the support zone, respecting that lateral channel that I commented on last week.

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This leaves us with a scenario very similar to that of last week, with the price close to the lows, but without the certainty that it is a rigid support zone, as we have seen many tests to that zone without making new highs, as seen in the following 1d chart.

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On the other hand, the dominance of BTC has not changed much either. There has been that small rejection that I was commenting on from 41.7% and that subsequently bounced from the lower area of the ascending triangle that we saw last week.

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This formation remains in force and we will have to pay special attention in case there is a bullish breakout that would confirm this figure or a bearish breakout that would invalidate the formation.

This slight weekly increase in the dominance of BTC accompanied by the price retracement of $BTC, leaves us with a market generally in the red, with tokens that have been significantly devalued as $AXS or $PERP that accumulate -16%, others that close with a result very close to 0% as $EGLD or $MATIC and a few that have managed to close in positive as $CRV or $AAVE that have a weekly result of +8%. Although this week the special recognition goes to $BAL, the Balancer governance token that has generated an increase of +18%.

Balancer is a Defi protocol for automatic market creation and has the ability to perform coin exchanges in a decentralized way (DEX) in addition to allowing the contribution of liquidity to different pools.

If we focus on the evolution of its price, we will be able to see this weekly increase and analyze how it has evolved.

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In the chart we can see how there was a bearish tertiary, trend that the price broke at the beginning of the week but with a movement without much volume. From Tuesday onwards, trading volume began to increase, generating that confirmation of the break of the short-term trend and with a movement that leaves us with a bullish RSI crossing to the 70 zone. This initial movement had its replica in the following hours, generating a +38% in just 10h and breaking the short-term resistance zone at $5.50.

The price went as high as $7.50, but bounced strongly from this price to settle in an area close to $6. 

This leaves us with a general situation with a long term bearish trend and a slight rebound from the support zone at $3.80 as can be seen in the daily chart.

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Seen from a daily perspective, this weekly movement does not acquire special relevance in the long term. So far the price has not managed to break any of the resistance zones that would mark the possibility of a change in trend.

If we focus on the current situation and how the price may evolve in the coming weeks, it is necessary to return to the 4h chart, where the relevant zones can be detected more easily.

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This price zone is very important for the future evolution of the price since in the event of a breakout to the upside, it would be generating a higher high than the previous one on the daily chart, which could imply a change in the long-term trend.  

Another relevant zone is $3.80-$4. This is the macro support zone and could be an inflection point in case the main downtrend is reactivated. If this support is broken, the fall could be exponential. 

In addition to these medium-long term zones, we must highlight the $5.50, which has acted as support and resistance during the last few months and may be an interesting entry zone to look for a short-term bullish reaction.

If we look at the RSI, we see that currently the indicator has dropped below the 70 zone after the rejection of the price from $7.50, this makes me opt for a reversal scenario from the current zone to $5.70-$5. 50 and could even seek support at $5, although this option would be discarded in the case of detecting a new crossover in the indicator that could lead us to test the resistance at $8. Along the way it would have to break $6.60 at the close of the candle, which would give us a greater likelihood of this second option.

Finally, remember that nothing discussed in our articles can be considered as investment advice. Everyone must do their own analysis and develop their own trading strategy. BELOBABA team only shows our analysis and investment tools, and how they help us in our operations when making decisions.