SRM bounces off key support, what’s next?

Serum (SRM) has bounced back from key support but has yet to confirm its bullish reversal.

There are key areas of resistance at $ 9.40 and $ 11 created by the Fib resistance levels. As long as the SRM does not cross them, the trend cannot be considered bullish.

SRM decreases after reaching ATH

The SRM has been falling since September 11th when it hit a new all-time high of $ 13.73 and created a shooting star candle. This is a candle with a long wick at the top, indicating strong selling pressure.

The downtrend continued until it hit a low of $ 6.70 on September 26th. The low was hit right at the 0.618 Fib retracement support, which is a common area to rebound after a sharp decline.

The super trend line is an indicator that is created from absolute highs and lows and can help determine the direction of the trend. It is green (bullish) for a 53-day period from July 29th to September 21st, parallel to an uptrend. In the meantime, however, it has become bearish.

The RSI is right on the 50 line and there is a risk that it will fall below it. The RSI is a momentum indicator and its movement above and below 50 determines the direction of the trend. Similar to Supertrend, it was above 50 (green symbol) on July 26th, ahead of the entire uptrend.

Daily SRM / USDT chart | Source: TradingView

Short term movement

Trader @TheEurosniper outlined the SRM chart, suggesting that the price could move up from the $ 8 zone.

The source: Twitter

After the recovery mentioned above, the SRM broke the descending resistance level that has existed since the all-time high.

However, it was rejected by the 0.382 fibonacci retracement resistance at $ 9.40. This is also a horizontal zone of resistance. For the reversal to be confirmed, the SRM must cross this level.

Above this level, the next target will be the 0.618 fib retracement resistance at $ 11.07.

SRM / USDT 6-hour chart | Source: TradingView

Count waves

The wave number most likely indicates that the SRM is in a long-term wave three (white) that should take it towards a new all-time high. The number of partial waves is shown in orange.

The preliminary target will be between $ 38.50 and $ 41.20, which will be created by the Fib expansion layers above the first wave (orange) and the first wave (white).

However, the goal is only an estimate as it depends on how the movement is formed.

SRM / USDT 3-day chart | Source: TradingView

The number of short-term waves is not clear. At the moment there are two options. First, the drop (highlighted) is partial wave two (orange), while the second possibility is that it is just wave A of the ABC correction (black) in the second partial wave.

However, both scenarios suggest a short-term upside move with the target being the 0.618 Fib resistance at $ 11.07 as detailed above. The shape of the upward movement will help determine the direction of the future trend.

SRM / USDT 12-hour chart | Source: TradingView

You can see the SRM prices here.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

SN_Nour

According to Beincrypto

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page