Loopring [LRC] rejected at $0.84, could it see merry days next week
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Data from Coinglass showed that the Futures markets had a higher percentage of short positions open than longs on Bitcoin. In the past 24 hours, $430m worth of positions were liquidated across the market, with an overwhelming majority of those positions being longs.
Hence, it seems fair to say that a bullish bias could be dangerous in the near term. This applies to Loopring as well, after it lost nearly 15% on the charts the previous day within the span of four hours.
LRC- 1 Hour Chart
The VPVR showed the $0.8 and the $0.85 areas to have a high trading volume in the visible range on the charts. the Value Area Lows and Highs are marked in gray on the charts, with the Point of Control lying at $0.731.
At press time, LRC was trading just above the POC. The rejection at the $0.8-$0.85 area meant that the bearish market structure was reinforced, even on the lower timeframes such as the 1-hour chart.
A bearish divergence was seen as LRC headed into a former demand area, and the sellers came out in force as Bitcoin plunged back beneath the $39k mark.
The price made a higher high the previous day (marked in white) while the Awesome Oscillator formed a lower high. Following this development, the price saw a sharp drop of nearly 14% within four hours.
the MACD was also rising above the zero line and on the verge of showing a strong buy signal but the drop forced the MACD back beneath the zero line. At the same time, OBV saw a drop but it was not sharp enough to break down beneath the highs of May.
In the short term, conditions are quite volatile and uncertain. Bitcoin could have found a bottom, but at the same time, it could also be preparing to nuke another 20%. Sometimes, the safest option is simply to wait for more favorable conditions. Loopring saw a weak bounce from the $0.71 area, but it could be forced beneath $0.7 in the hours to come.