PYTH Finds Support After 21% Decline — Bounce Could Spark a Rally
PYTH sits at ascending support. With a bounce expected there are multiple scenarios ahead.
Key Takeaways
- PYTH’s price was rejected at $0.40 resistance on Oct. 31.
- The five-wave structure suggests a potential bullish reversal.
- Breakout above $0.40 could confirm a new bull phase.
Pyth Network (PYTH) reached a high of $1.15 on March 16 before entering a sharp downtrend that saw its price plummet by nearly 70% to $0.35 by May 20.
After bouncing off a key support level, PYTH has since formed an ascending channel, showing signs of potential recovery despite recent rejections at $0.40.
With technical indicators hinting at a possible bullish reversal, the next breakout could signal the start of a new uptrend.
PYTH Price Analysis
PYTH’s price peaked at $1.15 on March 16, marking the end of an uptrend before dropping nearly 70% to $0.35 by May 20.
This decline brought PYTH down to a horizontal support level, where it bounced. However, it remained in a downtrend, moving within a descending channel.
There were signs of a possible reversal as on May 15, the daily Relative Strength Index (RSI) dropped to 25%, indicating extreme oversold conditions.
Instead, the price continued moving below $0.40 support and reached a lower low of $0.22 on Aug. 5. Since then, a recovery has followed, forming an ascending channel.
PYTH returned to retest previous support for the resistance of $0.40 on Oct. 31. It was rejected, sending it back to the ascending channel’s support, which currently sits at $0.33.
If we see a bounce, a new uptrend could lead to a breakout above $0.40, signaling the onset of a new bull phase.
PYTH Price Prediction
Examining the wave structure in the ascending channel, we see a five-wave advancement developed.
Although the waves overlap, it could be interpreted as a leading diagonal, the first uptrend in a new bull phase.
Further confirmation is needed, as the structure could be corrected before further decline. Multiple scenarios are ahead, and we will explore those that could be positive resulting from the expected bounce.
If the next upward move is the next starting uptrend on the subsequent retracement, PYTH should maintain a higher low of approximately $0.33.
Since its last high, we saw one wave to the downside, which isn’t enough to say that the correction after a five-wave move ended. This is why PYTH could continue moving down for a lower low to $0.25 and still be in a bullish projection.
In conclusion, a definitive breakout above $0.40 resistance will signal the starting of the bull phase.
Until this happens, further downside movement is still possible, either as the continuation of the bear phase or for its ABC correction to be fully developed.
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