FLUX is trading in a very crucial demand zone. It can be a perfect entry as the risk-to-reward ratio is very high. Although a downfall from here will not be good for the future of the asset.
- FLUX/USDT is up 3.19% today
- FLUX/USDT is trading at its all-time low price.
FLUX/USDT is trading at $0.420 which is just almost 9% above its all-time low of $0.382. The current level is also a minor resistance which was a support earlier. The price is showing a minor recovery from the past couple of days after a strong downtrend. Investors are closely watching this level as this could be a very good opportunity to enter into new positions. The logic behind this is the low-level risk and the potential of a very high reward.
The Daily chart shows that the price is in the demand zone.
Source: FLUX/USDT BINANCE price chart TradingView
According to the Daily chart, the last time the price was at this level was in November last year. During that time the price saw a massive rally of 167% to the price of $1.118 from this level. That marks the significance of this demand zone. Although the current market structure suggests that the market is in a downtrend. One sign of reversal can be spotted on RSI.
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As we can observe, the RSI is creating a bullish divergence and it can be a very effective signal on the Daily chart. For the upside, bulls will encounter the first hurdle at $0.477 which is a solid 14.7% from the current market price. The next resistance will be at $0.600 which will be almost a 40% ride to the upside. Towards the downside, the level of $0.382 is the ultimate line of defense. Below that it is an uncharted territory and could trigger a massive downfall.
The 4H chart is showing the formation of a double-bottom pattern
Source: FLUX/USDT BINANCE price chart TradingView
The 4H time frame is showing that the price was declining with bearish selling pressure. According to the technical analysis, the price action is forming a double bottom structure. This pattern is a trend reversal pattern and is usually formed at the bottom of a downtrend. Considering the RSI Divergence on the daily time frame along with this double bottom, the probability of a trend reversal is getting high.
Investors must watch the level of $0.431 as this is the neckline of the double bottom. It is also a local resistance. If a 4H candle closes above this level along with good volume, the chances of an upward move will increase significantly. It is important to remember that the price is in bear territory and the price can fall down any time. It is recommended to follow proper risk management and to watch out for more confirmations.
RSI: The RSI indicator is currently at 55.88 and the RSI has crossed the MA line towards the upside. This is a sign of bullish to sideways market condition.
MACD: The MACD indicator made a bullish crossover, the MACD line is slowly making its way above the 0 line highlighting the probability of an uptrend.
200 EMA: As observed, on the 4hr, the price is trading below the 200 EMA(exponential moving average) which acts as a significant resistance. This is a clear indication of a downtrend where the sellers are in control and for a trend reversal, the price must break and trade above the 200 EMA.
Technical levels
Support Levels: $0.381
Current Price: $0.420
Resistance Levels: $0.431 – Resistance 1
$0.477 – Resistance 2
Conclusion
FLUX has been under selling pressure since last month. This caused the price to fall to a crucial support Zone. This also makes it a very attractive level for investors to buy. The main logic behind this is the fact the risk is quite low, about 9%. Such a risk is normal in the world of cryptocurrency if the capital is managed properly. With a proper stop loss, entry at the current market levels can potentially fetch a good reward.
