Over the last three weeks, the THETA price has halved and is currently testing a critical support level, which may encourage dip buyers. However, if the crucial support level fails to hold, an ugly cascade of selling could send Theta (THETA) much lower.
After dropping to $3.50 in July, the video-streaming token reversed higher, gaining around 160% by the first week of September. However, on the 7th of September, Bitcoin (BTC) dropped 18% without warning, triggering a meltdown in altcoins. The Theta price started the day at a three month high of $9.81 before crumbling. At one stage, the coin was down 41% on the day before dip buyers pared the loss to down 28%. Since then, the bears have taken control of the price, and THETA has been trending lower. As a result, the price has given back almost all of the bull market that started in July.
The daily chart shows THETA has retraced to significant trend line support. The trend at $4.50 starts in December 2020 and has underpinned this year’s bull market. Therefore, if the THETA price loses the trend support, it will likely encounter stop-loss and momentum selling. In that event, a return to the July $3.50 low is probable. Furthermore, a deeper sell-off would target the former all-time high at $2.55.
That being said, for now, the trend is holding, and if Theta turns higher, the bulls will be encouraged. The longer the price remains above trend support, the chances of a recovery increase. However, the trend line is vulnerable until the price recaptures the 100-day moving average at $6.30. Therefore, the current Theta price prediction is neutral between $4.50-and $6.30, bearish below $4.50, and bullish above $6.30.
For more market insights, follow Elliott on Twitter.