PYTH Surges 31% and Is Now Challenging Resistance
The Pyth Network price is attempting to break above the $1.1325 resistance level, which is also confluent with the upper boundary of a medium-term positive price channel. This channel formed after PYTH printed a series of higher highs and higher lows over the past couple of weeks.
Should the Pyth Network price close a 4-hour candle above the $1.1325 barrier, it may have the foundation needed to keep rising in the following few days. This bullish thesis could be invalidated if the altcoin gets rejected by the major resistance level.
In this alternative scenario, the Pyth Network price could drop to the immediate support level at $0.9580, which will be a key level to watch as it is around the same level of the middle boundary of the aforementioned price channel. Falling below this point could then expose PYTH to the risk of dropping to $0.7705. However, before the crypto can reach this point, it will have the lower boundary of the price channel as the last line of defence.
Losing this support may lead to the Pyth Network price dropping below $0.770 to potentially fall to as low as $0.6570 in the short term.
Technicals Flagging Bullish for the Pyth Network Price
The Relative Strength Index (RSI) indicator on the 4-hour chart shows that the crypto is overbought. This is usually seen as a sell signal by traders since the downside potential is greater than the upside potential. However, it is not unusual for the RSI to remain high for a sustained period of time when a crypto is pumping.
The Moving Average Convergence Divergence (MACD) indicator shows that the Pyth Network price is in a positive cycle as the MACD line is positioned above the MACD Signal line. In addition to this, the prior is breaking away above the latter, which suggests that the bullish trend is growing stronger.
Potential Trade Strategies for the Pyth Network Price
Long Position Strategy
Entry Conditions:
Primary Entry Signal: Wait for the PYTH price to close a 4-hour candle above the $1.1325 resistance level. This indicates a successful breakout and could signify the continuation of the bullish trend.
Secondary Entry Signal: Consider a bullish MACD crossover as additional confirmation, where the MACD line extends further above the signal line, particularly after the price breaks above $1.1325.
Exit Conditions:
Take Profit: Set the initial take profit level near the next significant resistance level after $1.1325. Given the bullish context, a reasonable target could be a psychological level or a previous high. Without specific next levels mentioned, consider setting this around 5-10% above the entry point.
Stop Loss: Place a stop loss slightly below the breakout level, around $1.12, to minimize losses if the breakout turns out to be a false signal. Adjust the stop loss to break even once the price moves significantly in favor.
Risk Management:
Monitor the RSI for signs of continued overbought conditions. If the RSI starts to decline from high levels, consider tightening the stop loss to protect profits.
Short Position Strategy
Entry Conditions:
Primary Entry Signal: Look for a 4-hour candle closure below the immediate support level at $0.9580, particularly if it coincides with the price falling below the middle boundary of the price channel. This could indicate a bearish trend reversal.
Secondary Entry Signal: A bearish MACD crossover, where the MACD line crosses below the signal line, would reinforce the bearish entry signal, especially if coupled with an overbought RSI starting to decline.
Exit Conditions:
Take Profit: Set the initial take profit level at the lower boundary of the price channel or the next key support level at $0.7705. Adjust according to the momentum and the presence of further supports.
Stop Loss: Place a stop loss just above the $0.9580 level or the middle boundary of the price channel to limit losses if the price unexpectedly reverses direction and goes back into the channel.
Risk Management:
- Since the RSI indicates overbought conditions, a short position might initially seem counterintuitive. Monitor the RSI closely for any signs of decreasing momentum or a turn downwards, which could justify the short position further.
### General Tips:
- Always use a risk-reward ratio that suits your trading profile. A common ratio is 3:1, meaning you aim to gain three times what you risk losing.
- Adjust your position sizes according to the volatility and the strength of the entry signals.
- Keep an eye on market news and Pyth Network developments, as fundamental factors can quickly change the technical outlook.
- Consider using trailing stops for both strategies to lock in profits as the price moves in your favor.
This structured approach to trading based on the technical analysis provided should help in navigating the potential movements of the Pyth Network price. Always remember, no strategy guarantees success, and it's crucial to prepare for all outcomes by managing risks appropriately.
Should the Pyth Network price close a 4-hour candle above the $1.1325 barrier, it may have the foundation needed to keep rising in the following few days. This bullish thesis could be invalidated if the altcoin gets rejected by the major resistance level.
In this alternative scenario, the Pyth Network price could drop to the immediate support level at $0.9580, which will be a key level to watch as it is around the same level of the middle boundary of the aforementioned price channel. Falling below this point could then expose PYTH to the risk of dropping to $0.7705. However, before the crypto can reach this point, it will have the lower boundary of the price channel as the last line of defence.
Losing this support may lead to the Pyth Network price dropping below $0.770 to potentially fall to as low as $0.6570 in the short term.
Technicals Flagging Bullish for the Pyth Network Price
The Relative Strength Index (RSI) indicator on the 4-hour chart shows that the crypto is overbought. This is usually seen as a sell signal by traders since the downside potential is greater than the upside potential. However, it is not unusual for the RSI to remain high for a sustained period of time when a crypto is pumping.
The Moving Average Convergence Divergence (MACD) indicator shows that the Pyth Network price is in a positive cycle as the MACD line is positioned above the MACD Signal line. In addition to this, the prior is breaking away above the latter, which suggests that the bullish trend is growing stronger.
Potential Trade Strategies for the Pyth Network Price
Long Position Strategy
Entry Conditions:
Primary Entry Signal: Wait for the PYTH price to close a 4-hour candle above the $1.1325 resistance level. This indicates a successful breakout and could signify the continuation of the bullish trend.
Secondary Entry Signal: Consider a bullish MACD crossover as additional confirmation, where the MACD line extends further above the signal line, particularly after the price breaks above $1.1325.
Exit Conditions:
Take Profit: Set the initial take profit level near the next significant resistance level after $1.1325. Given the bullish context, a reasonable target could be a psychological level or a previous high. Without specific next levels mentioned, consider setting this around 5-10% above the entry point.
Stop Loss: Place a stop loss slightly below the breakout level, around $1.12, to minimize losses if the breakout turns out to be a false signal. Adjust the stop loss to break even once the price moves significantly in favor.
Risk Management:
Monitor the RSI for signs of continued overbought conditions. If the RSI starts to decline from high levels, consider tightening the stop loss to protect profits.
Short Position Strategy
Entry Conditions:
Primary Entry Signal: Look for a 4-hour candle closure below the immediate support level at $0.9580, particularly if it coincides with the price falling below the middle boundary of the price channel. This could indicate a bearish trend reversal.
Secondary Entry Signal: A bearish MACD crossover, where the MACD line crosses below the signal line, would reinforce the bearish entry signal, especially if coupled with an overbought RSI starting to decline.
Exit Conditions:
Take Profit: Set the initial take profit level at the lower boundary of the price channel or the next key support level at $0.7705. Adjust according to the momentum and the presence of further supports.
Stop Loss: Place a stop loss just above the $0.9580 level or the middle boundary of the price channel to limit losses if the price unexpectedly reverses direction and goes back into the channel.
Risk Management:
- Since the RSI indicates overbought conditions, a short position might initially seem counterintuitive. Monitor the RSI closely for any signs of decreasing momentum or a turn downwards, which could justify the short position further.
### General Tips:
- Always use a risk-reward ratio that suits your trading profile. A common ratio is 3:1, meaning you aim to gain three times what you risk losing.
- Adjust your position sizes according to the volatility and the strength of the entry signals.
- Keep an eye on market news and Pyth Network developments, as fundamental factors can quickly change the technical outlook.
- Consider using trailing stops for both strategies to lock in profits as the price moves in your favor.
This structured approach to trading based on the technical analysis provided should help in navigating the potential movements of the Pyth Network price. Always remember, no strategy guarantees success, and it's crucial to prepare for all outcomes by managing risks appropriately.