Waves Analysis – WAVES

This week we have seen more fluctuation in the crypto asset market, particularly in $BTC which last Monday managed to break out of the range in which it was involved in recent weeks, generating a bullish move that came to touch the bearish trend line, from where the price bounced looking for support in the previous range.

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On the other hand $ETH has made a bullish move at the beginning of the week with its subsequent rejection from the trend line, it remains in that range between $2200 and $1700 and has left a lower high than the previous one which is forming a bearish channel as we can see in the chart.

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This difference between the two assets is clearly seen in the ETH/BTC pair, which continues to make new lows and is approaching the 0.055 support zone.

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The rest of the market has had a very uneven evolution seeing tokens like $SOL or $AVAX losing about -15% of its price and others like $ADA or $ICP rising +15%, but undoubtedly the winners of the week has been $WAVES, the native token of the Waves Exchange, which rose more than 100% in 2 days, going from trading at $4.35 to reach over $11.

Waves is a decentralized Exchange that has its own blockchain. In addition to allowing its users to exchange tokens, you also have staking options.

Its native token WAVES, is an unbounded supply token that is used for standard payments, such as block rewards.

The price performance of $WAVES has been very volatile, especially in recent months, with fluctuations between $8 (January low) and $64 (ATH March 31) in the first quarter of the year, and then generating a bearish move to $4 (May low). In this $4 area it has found support and has generated the upward movement I mentioned above.

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This price variation has caused a market widening situation, as we can see in the chart.

I would like to point out that this support zone between $4 and $5 was a resistance zone in August 2020, prior to the upward movement in early 2021, so it is a “logical” zone of rejection. 

One of the most remarkable facts is the increase in trading volume in this upward movement, which has been much higher than those recorded, as can be clearly seen in the weekly chart.

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This chart also shows the confluence zone at $11-$12, which served as support on different occasions, but currently has slowed the price rise, acting as resistance.

If we enlarge the image to a 4h chart, we can see how a bullish divergence was formed in the RSI, prior to this week’s upward movement, but we can also see how in recent days the price has failed to break the resistance, generating a small bearish divergence in the RSI, which could imply a rebound from that area.

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In the 4h chart, I have included the Bollinger bands, an indicator that plots volatility bands around the price and that in this timeframe is being quite respected.

In conclusion, $WAVES comes from a pronounced downward movement, but this week has generated a bullish bounce with increased volume that has been stopped at resistance.  If we focus on what the evolution of the price of $WAVES can bring us, the proximity to resistance and this bearish divergence indicate that a bearish bounce may occur in the short term, as the background movement is bearish, but the increase in trading volume may precede a counter-trend upward movement, which would gain strength in case we see the creation of new lows and highs in the micro trend.

Finally, remember that nothing in our articles can be considered as investment advice, everyone must do their own analysis and develop their own trading strategy. From the Belobaba Crypto Fund team, we only show our analysis and investment tools and how they help us in our operations when making decisions.