Technical Analysis - Horizen
ZEN/BTC - 12/06/2019
As shown in the chart above, we will be analyzing the technical status of Horizen against Bitcoin.
We will be asking a series of questions to come to a reasonable conclusion:
What is the current market structure?
Currently, we can see ZEN getting rejected from a key-area of resistance. Nevertheless, this time before the rejection, we see a beautiful bottoming process with a round bottom. Lately, a lower area of resistance has broken with a high buy-volume, to which the price seems to be coming back to. This would be a classical “Support and Resistance Flip”.
How likely is this “S/R Flip”?
To determine that, we have to look at the probability of bounce at the area of previous resistance. In this case, we are using the Fibonacci Tool, applying it at the start and the end of the most recent swing. By doing so, we can see that the previous area of resistance aligns perfectly with the area between the 61.8% and 50% Fibonacci level. Due to this fact, the chances are increasing to support our idea of a potential S/R Flip.
What impression give the indicators?
Looking at the volume, we want to see insignificant sell-volume on the retrace to increase the chances of a bounce at a key-area. This is exactly what we can observe - low and negligible volume on a strong and significant candle body. Furthermore, we are observing the TJ-Index, which is at 10 out of 15 points and in a downtrend. This is giving us further confluence that the retrace we are seeing is valid and “healthy”. In the best-case scenario, we would like to see a low TJ-Index at the mentioned key-area. Lastly, we take a look at the MKAST Algorithm, which showed a Sell-Signal on the most recent candle, once again, giving more confluence for this retrace and minimizing the potential of a direct trend-continuation.
Overall, we can observe a very beautiful and healthy uptrend after a decent bottoming process. With a healthy uptrend, there comes as well a healthy retrace, which we are seeing and expecting to reach the mentioned “previous key-area of resistance”. This being said, the retrace is not over yet, and an experienced trader would mark down the mentioned levels, and look for signs of strength to justify entry, as soon as these are reached.
This Technical Analysis is made by Kong Trading. The provided Analysis should not be considered financial advice!