Can Waves return to $4.2 after its recent failure?

Disclaimer: The information presented does not constitute financial, investment, business or other advice and is the opinion of the writer only.

Bitcoin rallied to $19.5k and bearish orders posted on lower timeframes rejected the bulls' advances. Bearish targets include $17,800.

If Bitcoin falls below $19,000, it could drag the rest of the crypto market down as well. Data from Coinglass shows nearly $120 million worth of Bitcoin liquidations in the last 24 hours alone. Despite BTC's weak rally, Waves has had some success breaking above the $4 mark over the past two days.

WAVES- 4-hour chart

The H4 chart shows that the price fell sharply in a week in September. The market structure turned to a strong downtrend after WAVES failed to hold $4.80 and also broke through $4.68.

In the following days, the price bounced between $4.2 and $4.37 without much intention. A few days ago, the support at $4.2 failed and was retested as resistance.

In the past few hours, Waves fell below the $4 level again. Trendline support (white) has been spotted, but it may not be particularly strong as it only has two price touches on the chart.

WAVES- 1 hour chart

For context, the higher timeframes (above H4) favor the bears more than the bulls. Momentum has favored sellers over the past two weeks, and the rally from $3.7 has not been particularly strong. Even the attempt to rally to $4.2 a few days ago was vehemently rejected, and a push south to $3.8 followed shortly after.

Therefore, any long position inside the $3.95 support area is potentially quite risky. After WAVES failed to defend $4, it gave more credence to the bears that have the upper hand in the short term. Therefore, a selling opportunity may present on a retest of the $4 (cyan) zone.

The Fibonacci retracement levels (yellow) suggest $4.02 and $4.08 could oppose buyers' attempts to force the price higher. The RSI has moved below the neutral 50 level to mark bearish momentum. CMF also dropped below -0.05 indicating a significant amount of capital leaving the WAVES market.

OBV has yet to witness a strong recovery and recorded a strong sell shortfall last week.

Conclusion

The price dropped below $4, which is a significantly lower timeframe of development. It stopped at $3.92 momentarily. A retest of the $4,022 mark will likely present a selling opportunity. The invalidation of this bearish idea would be a move back above $4.08-$4.1. On the south side, short sellers can make a profit of $3.83 and $3.76.

Sep 24, 2022