Technical Analysis - OCEAN
OCEAN/BTC - 01/03/2020
As shown in the chart above, we will be analyzing the technical status of Ocean Protocol against Bitcoin.
We will be asking a series of questions to come to a reasonable conclusion:
What is the current market structure?
Currently, on the 2D, we can see that OCEAN broke the previous resistance and is now, after a strong impulse move, showing some signs of weakness, which could indicate an incoming retrace to the area of the breakout. We can clearly identify overbought conditions, and a bearish start of a trend like this should not be ignored. Even though a re-test of local highs to form a structure like a double top is quite likely.
How likely is a further downside from here?
As mentioned above, a bearish retrace in overbought conditions is clearly not a bullish sign. Nevertheless, looking at the rules of Fibonacci, should we see a bounce and a strong reaction along with the 38.2-50% levels, we could be expecting massive upside action. Obviously, this enormous upside action is nowhere to be expected by an experienced trader and just a fact to react to after the local highs have been broken. The more likely scenario here is that this is just the beginning of a healthy retrace back to the area of the breakout, shown here as the green box.
What impressions give the indicators?
The MKAST Algorithm has printed a Sell-Signal, which has been pretty reliable in the history of this asset, giving us further confluence for a start of a retrace and not just a deviation of the trend/ impulsive move upwards. The TJ-Index is showing 10 out of 15 points, still being in overbought conditions and indicating to us that a continuation at these levels is rather unlikely.
OCEAN Protocol is definitely a reliable pair technically and surely something to keep an eye on. Nevertheless, an experienced trader would not be entering/buying the levels that it is at right now without further confirmation. After an impulse move, mostly a retrace follows, which leads to the next impulse move. Multiple aspects, as elaborated above, are indicating the beginning of a retrace right now.
This Technical Analysis is made by Kong Trading. The provided Analysis should not be considered financial advice!