While bitcoin is struggling to take back $12,000 and resume its uptrend, other cryptocurrencies are flexing their muscles. One, in particular, is worthy of attention: Komodo. The privacy coin that enables fungible transactions has risen from lows of $0.61 in January 2019 to $1.55 as of press time.
The crypto token has caught fire recently as bitcoin started to correct from highs of $13,868.44. Komodo rallied from $1.104845 on June 28th to as high as $1.94 on July 7th. That’s a stellar increase of 75 percent in less than two weeks. Closer inspection tells us that Komodo is not stopping anytime soon.
Komodo has risen in the last couple of weeks without getting the attention of many retail traders. Nevertheless, the breakout is undeniable.
A look at the daily chart shows that the cryptocurrency started to gain bullish attention on March 27th when there was a sudden volume uptick. From that point, volume remained elevated.
In technical analysis, volume precedes price action. In other words, a spike in volume often leads to a significant increase in price. This is a phenomenon that we can observe in Komodo.
Notice that volume started to rise just as Komodo formed the right shoulder of the massive inverse head-and-shoulders pattern. This is not surprising because volume upticks are hallmarks of an asset that’s ready to break out of accumulation. It is a sign that the smart money is running out of time to accumulate positions. Thus, they buy in bulk before they trigger the breakout.
Signs point to this very dynamic playing out in Komodo. Buyers came in droves and this triggered the breakout from the inverse head-and-shoulders pattern on July 5th.
While Komodo’s 165 percent growth is striking on its own, the crypto is just getting started.
A look at the weekly chart shows that the market built its base between $0.50 to $1.50 for 11 months. Now that it broke out of the range, those who bought at the bottom and patiently accumulated positions for almost a year have big plans in mind.
Based on the height of the inverse head-and-shoulders structure, the target of the breakout is around $2.50. Interestingly, the first resistance from the macro perspective is between $2.40 and $2.50. But, that’s only the initial stop. Komodo has more upside potential.
Due to Komodo’s long base-building window, there’s a plausible upside as high $3.50 before the end of the year.
With bitcoin struggling to take back recent highs, there are other cryptocurrencies that are ready to step into the limelight. Komodo has grown by 165% since early this year and it looks like the cryptocurrency is not done yet. With the recent breakout, there is a good likelihood that Komodo is heading to $3.50 before the end of 2019. This bullish outlook is mainly due to the cryptocurrency’s extensive base-building period.
As they say in trading, “the longer the base, the higher the space.”
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.
Last modified: March 4, 2021 2:37 PM