The prospect of any (REN) As the classic bearish reversal pattern begins to emerge, its continued rebound to new highs seems very slim.
Dubbing Head and shouldersWhen the price forms three peaks, the setting appears, the middle peak (called the head) is longer than the other two peaks, called the left shoulder and the right shoulder. The bottom of these peaks is supported by the neckline.
This pattern mainly plays a role when the price breaks below the neckline in a correction after the formation of the right shoulder. This motivates traders to open a short entry below the neckline, and the length of their ideal target is equal to the distance between the head high and the neckline.
What is behind REN’s current settings?
REN has been forming an upward sloping head and shoulders, supported by the rising neckline.
Specifically, the price of REN will rise and fall into a trough around mid-December 2021, forming a left shoulder. Later, it rebounded sharply, creating a higher peak—above the highest level of the first shoulder—and then fell again.
REN rebounded since then Again, its right shoulder is now being formed, as shown in the picture below.
As a result, the REN price It may continue to rebound until the right shoulder formation is completed, which may be close to the 50-day exponential moving average; the velvet wave is close to 0.67 USD. This is because the wave recently limited the history of REN’s price rebound.
Due to its historical correlation as support and resistance, additional selling pressure may also come from the 0.618 Fib line near $0.633. Overall, it looks like a callback may occur, which will make REN the right shoulder. At the same time, correcting the neckline and then breaking below the neckline will confirm the head and shoulders structure.
Doing so may move REN’s downside target to $0.30, which is measured after adding the distance between the head high and the neckline to the breakout point. This is about 50% lower than the current transaction price of $0.59.
Long-term outlook remains bullish
REN’s head and shoulders setting is part of a broader price adjustment, which has fallen by nearly 70% from its all-time high near $1.92 set in February 2021.
On a longer time frame chart, REN seems to be only integrating in a huge internal Symmetrical triangle, Indicating that its correction to US$0.30 may eventually lead to a rebound to US$1.20.
The bullish clues for REN may also come from the growth of its namesake supporters. Ren’s core product, virtual machine, Bring interoperability Decentralized finance Ecosystem (DeFi). When users use zero-knowledge proofs to move between blockchains through sMPC-based protocols, it saves users’ digital assets.
REN acts as a bond to run the so-called Dark node Provide power for RenVM’s sMPC network. Those who deposit 100,000 REN are able to run these dark nodes and therefore can receive Bitcoin rewards (Bitcoin), ether (Ethereum), Zcash (Jersey) And other tokens.
This Total value locked RenVM’s digital assets (TVL) minted on all chains (including Ethereum, Binance Smart Chain, Solana, Polygon, Fantom, Avalanche, and Arbitrum) were USD 1.05 billion at press time, compared to USD 6.6 million in June 2021.
At the same time, on January 4, 2022, the total transaction volume of RenVM transactions on all chains reached a record high of US$8.89 billion. This indicates that the adoption rate of the Ren network has steadily increased, which has promoted the upward prospects of the REN token.
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