Like every Crypto Nugget on Wednesday, let’s take a look at the charts to analyze an asset selected by you on our social networks. Today’s winner is UOS, the main asset of the ULTRA project. As investors await access to the platform’s general public and the arrival of new features, UOS seems struggling to resist the decline. Indeed, this reasoning applies to the vast majority of cryptocurrencies on the market. But then, does the asset have enough to recover in the coming weeks? This is what we will see in this new technical analysis.
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The pending UOS resource
After a long period of accumulation from September 2019 to July 2020, the UOS exploded higher and recorded numerous highs, which allowed it to record a always high at $ 2.49. However, like the rest of the market, UOS has borne the brunt of the decline in financial markets. It recently broke a support zone that was the former resistance, which demonstrates the strength of the sellers in front of buyers.
On this weekly scale, you can see the strength of the bearish trend with the quote of valleys and descending peaks. The recent bearish wick has stopped at the same level as a previous low. There is therefore a EQL (Equal Low) below which the price will have to seek liquidity. On the upper levels, you can see a supply area and several FVG (Fair Value Gap) that formed in the previous weeks. The ideal scenario would be a return to supply area before continuing to descend. However, I am not in favor of this scenario. How come ?
The macroeconomic context does not bode well for a lasting recovery in assets at risk like cryptocurrencies, indeed. Therefore, it seems to me too optimistic to predict a return to $ 1.22. As part of the downtrend, we must have in our sights, in addition to the minimum of $ 0.29the question area (supply area) weekly at $ 0.168 on which the price is likely to come in for a small spin. But first, it is possible that UOS will make a short stopover in the area of 0.20 / 0.21 dollars.
Price compression with low volatility
On the daily time slot, you can see how the price reacts on the levels identified in the upper time slot. Returning to UOS bullish rebound scenario, to what extent can we predict a price return? From a return to the supply area does not appear to be in the cards, the current price squeeze could potentially result in a rebound of up to $ 0.54 to fill a Weekly FVG. At best, we can have the bottom of the technical area at $ 0.67 in our sights. However, I fear that a return to higher levels, especially for an altcoin, seems unlikely given the current market.
After a potential return to these levels, the trend would still be bearish on a weekly scale. However, the price can also continue to fall without establishing an upward correction, which would demonstrate the strength of the sellers despite several weeks of decline. So what should we consider next? First, a price return below the Equal Low at $ 0.29.
Thereafter, the price should continue its descent with a return, sooner or later, in the weekly demand zone so that big wallets can close orders at a loss. In this technical zone, the price is likely to react sideways. At this time, you will need to monitor the pricing structure. Will we see a build up that will materialize in a bullish rebound? Or will we have to deal with a new distribution (to the next local top) which will result in a continuation of the bearish trend? Let’s be alert to be prepared for possible scenarios, when a decision needs to be made.
The game token in effect against bitcoin
To complete our analysis of Ultra (UOS), I find it interesting to take a look at the chart against bitcoin. This determines the situation of the altcoin against the king of cryptocurrencies, whether it is in a position of strength or not. Currently, after an all-time high of 4,500 Satoshi, the UOS is back to its October 2021 levels. This is a key area it has rebounded to continue to outperform at the end of last year. This zone, which stands at 1,000 Satoshi, should not be lost if UOS does not want to follow the line of the previous weeks: an underperformance compared to bitcoin.
We can imagine a rebound of the asset ? Yes, it is possible that UOS will try to hold by returning to 1,845 Satoshi (lower limit of the upper gray zone). The trend would still be bearish on a weekly basis with a low and a descending peak, which does not bode well for the gaming industry token.
The challenge lies in the area of the 1000 Satoshi we just talked about. A loss of the latter will lead to UOS weakness in the cryptocurrency market. If bitcoin is set to decline, UOS will be much more fragile. Conversely, an increase in bitcoin will not lead to incredible performance of the asset in question. Therefore, in the event of a downward shock, two other levels will be monitored:
Here we are at the end of the UOS analysis! Currently in a price squeeze situation, volatility will return very soon! From now on, you have in your hands all the key levels to monitor, both against the dollar or bitcoin. The fragile macroeconomic context and the exclusion of risk-on assets should warn you on one point: you must better manage your risk by paying attention to the positions taken on altcoins. Small bullish bounces may occur, but the underlying trend is still bearish for the entire market. There is, for the moment, no signs of a price reversal in the long term.
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