Key Takeaways
In November 2024, AIOZ broke out from a long-term horizontal resistance area and reached the highest price in over three years. While this was expected to catalyze the start of a long-term rally, AIOZ failed to sustain the positive trend and deviated above the horizontal area, confirming it as resistance.
AIOZ showed hope with a sharp bounce on Jan. 26, but the recovery was short-lived. The price failed to break out and has lost most of its previous gains. With that in mind, the question is if AIOZ can begin a sustained recovery, or if the $0.75 area will fall and lead to lower prices.
The daily time frame AIOZ chart shows that the price has fallen under a descending resistance trend line since its yearly high of $1.33 on Dec. 1. The trend line has caused numerous rejections so far (black icons), the most recent on Jan. 5.
During this period, AIOZ has also traded above the $0.75 horizontal support area. The AIOZ price reached the support on Jan. 26 (white icon) and initiated a bounce, nearly reaching the resistance trend line (black circle).
However, the increase could not be sustained and AIOZ has nearly returned to the support area again. The area is critical for the future trend since a breakdown below it could trigger a 35% decline to the next support at $0.52.
Technical indicators are unclear. While the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) have both generated bearish divergences, they are below their bullish thresholds at 50 and 0, respectively. The indicators also trend downward.
So, the daily time frame readings are insufficient in predicting if the AIOZ trend’s direction is bullish or bearish.
While the daily time frame readings are mixed, the weekly chart is decisively bearish. The long-term outlook shows that AIOZ has deviated (black circle) above the $0.95 horizontal area (black circle) and then fallen below it. Such deviations often lead to movements in the other direction, especially when they transpire at a long-term horizontal level as is the case for AIOZ.
Furthermore, the AIOZ price deviation happened after a completed five-wave upward movement, increasing the likelihood that the upward trend is done.
Technical indicators are decisively bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) have both gernerated bearish divergences (green). Bearish divergences in such a time frame are rare and often lead to bearish trend reversal. The bearish cross in the MACD further reitrates this bearish outlook.
Finally, a bearish divergence often happens between waves three and five, reiterating that this is the correct count.
So, the weekly chart suggests the AIOZ trend is bearish and more downside is likely. If the decrease continues, the next closest support is at $0.57, created by a horizontal support area and an ascending support trend line.
The AIOZ price showed strength by bouncing at the $0.75 horiozntal support area and preventing a breakdown. However, the bounce did not cause a breakout from the main resistance trend line. Also, it is insufficient in invalidating the preivous deviation above resistance, a sign that the long-term trend is still bearish.