Powerledger price analysis 4 Jan: Time to be greedy or fearful?

Powerledger may remain volatile in the short term

Powerledger may remain volatile in the short term                                 
External validators may soon be able to join the Powerledger chain. Pic: Alamy

Powerledger, the Australia-based platform set up to enable peer-to-peer energy trading, said in a blog post recently that developers and validators, early supporters of the project, are testing the Powerledger chain. External validators may soon be able to join the chain in the new year. Powerledger is also working on launching two staking mechanisms for investors. The first one is likely to be available early in the new year while the second, which is a more decentralised approach for staking POWR, the Ethereum token that powers the Powerledger platform, is expected to be released later.

Meanwhile, The Australian, citing confidential accounts for the year ending 30 June 2021, said Powerledger showed “a loss before capital gains of $5.2m“. The pre-tax profit of roughly $32m was mainly due to the $37.2m capital gains on the sale of crypto assets.

Jemma Green, ex-JPMorgan banker and founder of Powerledger defended the performance and said: “We are in a phase akin to pre-Netflix in energy markets and we are executing our plans consistent with our understanding and expectations of the market.”

Green said the company was “not anticipating to be cash flow-positive from normal operating activities in the next three years.”

Will POWR go up further on the back of its future promise or will it succumb to profit-booking? Read the POWR price analysis to find out what the charts suggest.

Powerledger technical analysis: weekly chart

Powerledger weekly chart
Powerledger weekly chart. Credit: Currency.com

POWR’s price is attempting to form a large rounding bottom pattern, which will complete on a breakout and close above $0.78. If bulls sustain the price above this resistance, the pair could start a new uptrend.

The first stop could be the psychological level of $1, but if this level is crossed, the POWR/USD pair could start its journey toward the pattern target of $1.53. 

The relative strength index (RSI) is showing a negative divergence, indicating that the up-move could be in danger of reversing. 

If the price turns down from the current level, it will suggest that bears continue to aggressively defend the resistance at $0.78. The first support on the downside is $0.57 and if this level cracks, the pair could drop to $0.40.

Powerledger technical analysis: daily chart

Powerledger daily chart
Powerledger daily chart. Credit: Currency.com

POWR’s price rallied vertically from a low of $0.40 on 1 January to an intraday high of $0.85 on 3 January, more than doubling in just a couple of days. However, the bulls could not achieve a close above $0.80, which may have attracted profit-booking from short-term traders.

The pair has pulled back toward the $0.60 level, which is likely to act as a strong support. If the price rebounds off this level, the bulls will make one more attempt to clear the overhead hurdle. A breakout and close above $0.80 could signal the start of the next leg of the uptrend.

Contrary to this assumption, if bears pull the price below $0.60, the pair could drop to the uptrend line. This level has previously acted as a strong support, hence the bulls are likely to defend it with all their might.

If the price bounces off the uptrend line, the buyers will try to keep the up-move intact. But if the pair breaks below the uptrend line, it will suggest the start of a deeper correction to $0.40 and then to $0.25.

Powerledger: buy or sell at current levels?

Powerledger’s price analysis suggests that a break and close above $0.80 could signal the start of a new uptrend. However, the pair is known to rally sharply and then quickly give back a large part of its gains. Volatility is likely to remain high and investors should trade with caution. On the downside, a break and close below $0.60 could attract further selling.

Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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