Loopring Price Jumps 70% as Dip Buyers Pile in after the crash

Summary:

The Loopring price is back in bull mode and close to erasing all of Saturday's flash-crash losses but don't expect new highs anytime soon.

The Loopring price is back in bull mode and close to erasing all of Saturday’s flash-crash losses but don’t expect new highs anytime soon.

Loopring (LRC) snapped a seven-day losing streak, with a 20% gain on Monday, extending the bounce from the recent low to 70%. Like most cryptocurrencies, the LRC token crashed on Saturday during Bitcoin’s violent collapse. However, after sliding over 40% from top to bottom, Loopring finished the day down just 5%.

In my last Loopring article on December 1st, I discussed the potential for LRC to fall 40% from $2.782 to $1.713. On Saturday, the price exceeded my downside target, reaching a low of $1.491 before recovering. In my opinion, just as the price over-reacted on the downside, it may be operating on the upside. Therefore, I expect sellers to emerge between $2.500 and $3.000, limiting further gains.

LRC Price Analysis

The daily chart shows that the Loopring price is still trending lower from the November high despite the recent turnaround. Furthermore, LRC approaches horizontal resistance between $2.50-$2.60 (November 13/14/26 lows and December 4/6 highs).

In my opinion, the magnitude of the recent bounce and the uncertainty surrounding the crypto market should encourage dip buyers to take profits if the price moves higher. On that basis, I feel the current rally may soon run aground. Therefore, I prefer to enter short positions scale-up between $2.500 and $3.000 and close on a retracement into the $1.700-$2.000 range.

However, a daily close above the rising trend line at $3.320 suggests LRC will go higher, invalidating the short thesis.