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.
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.
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This post was last modified on Dec 07, 2021, 03:45 GMT 03:45