Bull Reversal? NEM Price Jumps as Coincheck Moves to Refund Users
NEM's XEM token is solidly bid following the Japanese exchange's announcement that it will commence refunding hacked users next week.
NEM's XEM token has seen a revival of sorts today, suggesting a short-term bottom is in place.
As of writing, XEM is changing hands at $0.349382 – up 8 percent in the last 24 hours, according to CoinMarketCap.
Still, the world's 13th largest cryptocurrency by market capitalization is down at least 83 percent from its record high of $2.09 set on Jan. 4. Also, XEM is one of the few cryptocurrencies that has not recovered in line with other crypto markets since the widespread drop on Feb. 6.
Notably, NEM's cryptocurrency was involved in a hack in late January, when hackers stole around $530 million-worth of the digital asset from Japanese crypto exchange Coincheck. Back then, XEM was trading just above $1 and was the 10th largest cryptocurrency as per market capitalization.
Following the theft, Coincheck announced on Feb. 1 that it would reimburse its investors for their stolen funds and that pushed XEM prices higher to $1.22. However, the spike was short-lived, courtesy of a broader market sell-off in early Feb.
Fears that hackers would sell the stolen 500 million XEM appear to have kept the bulls at bay. Thus, the cryptocurrency continued losing altitude through February and fell to $0.286299 yesterday – the lowest level since Dec. 8.
The uptick seen today is likely due to oversold conditions, as shown in the technical charts, as well as reports that Coincheck will start compensating customers that lost money in the heist starting next week.
Daily chart: RSI favors the bulls
Historical data shows that XEM usually gains when the relative strength index (RSI) is near 30.00 or below 30.00 (oversold region). That pattern has been repeated today, indicating XEM could gain altitude in the short-term.
Daily chart: Bullish reversal not confirmed
The above chart shows:
- Falling wedge pattern: A breakout (daily close above the wedge resistance) would confirm a bearish-to-bullish trend change.
- The 5-day moving average (MA) and 10-day MA are trending lower in favor of the bears. The 50-day MA and 100-day MA bearish crossover also favor further losses in XEM prices.
The bullish daily RSI pattern and XEM's 8 percent rise indicate a temporary bottom has been made at $0.271848, and the cryptocurrency will likely witness an upside break of the falling wedge. If so, that would confirm a bullish trend reversal and could yield a rally to $0.642539 (Feb. 17 high).
On the other hand, a dip below $0.271848 would open up downside towards $0.21 (wedge support).
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