Down for the third consecutive day, NEM's native token XEM is close to seeing a revival of the bear market, the technical charts indicate.
XEM prices reached an all-time high of at $2.09 on Jan. 4, before falling to $0.72 on Jan. 17, according to CoinMarketCap data. The recovery that ensued ran out of steam at the Jan. 21 high of $1.22.
Prices then hit a low of around $0.78 on Jan. 26 seemingly due to reports that 500 million XEM tokens, worth roughly $420 million at the time, had been stolen from Japanese exchange Coincheck.
While it was perhaps to be expected that XEM might continue the decline, the token turned higher and ran into offers on Jan. 27 at $1.08. It has since been in a slide, however, and, as of writing, the cryptocurrency is trading at $0.84.
The price action witnessed in the last two weeks indicates the cryptocurrency has created a series of lower highs and higher lows – i.e. narrowing price range, popularly known as a "symmetrical triangle" formation.
At press time, the technical chart indicates XEM is close to breaching the symmetrical triangle on the downside – a move which could revive the long-run bearish outlook.
The above chart (prices as per HitBTC) shows:
- Symmetrical triangle pattern (marked by blue lines) – a bearish continuation pattern. A close (as per UTC) below the triangle support of $0.8471 would signal revival/continuation of the sell-off from the Jan. 4 record high.
- Prices are flirting with key support $0.8471 (confluence of triangle support and 61.8 percent Fibonacci retracement July–January rally).
- The relative strength index (RSI) favors the bears.
- A daily close (as per UTC) below $0.8471 would open doors a drop to $0.55 (Jan. 16 low) and $0.51 (78.6 percent Fibonacci retracement of July-January rally).
- Bearish invalidation is seen on a daily close above $1.095 (Jan. 27 high).
Slide image via Shutterstock