Ren (REN) price analysis 6 Jan: Is the correction over?
Ren may extend its down-move
Ren is an open platform that acts as a bridge between blockchains to provide liquidity and interoperability. It is currently ranked 137 in the market cap league table, with a market capitalisation of $496m, according to CoinMarketCap data.
Ren recently said in a blog post that its Host 2 Host feature was live on mainnet and it “allows RenVM to support and bridge almost any asset on any blockchain”.
Data from Highcharts shows that the total volume transacted via RenVM on all blockchains has crossed $8.90bn on 6 January. However, the total value locked (TVL) of all digital assets minted on various blockchains has decreased from $1.5bn in mid-October 2021 to $983m.
Has the correction ended? Will REN go up? Read our REN price analysis to find out.
Ren price technical analysis: weekly chart
REN’s price has been correcting sharply since hitting $1.22 in early October 2021. This suggests that traders are aggressively exiting their positions.
The REN/USD pair is forming a large symmetrical triangle and the price could now drop to the support line of the triangle where the bulls may step in and arrest the decline.
If that happens, the bulls will again attempt to push the pair toward the resistance line of the triangle. However, the recovery could face resistance at $0.65 and again at $0.91.
The price action inside a triangle is usually random and volatile as both the bulls and the bears battle it out to gain supremacy. If bears sink and sustain the price below the triangle, the pair could drop to $0.23.
Such a fall could delay the start of the next leg of the up-move because the breakdown level from the triangle will act as a resistance during subsequent relief rallies.
The bulls will have to push and sustain the price above the triangle to signal the start of a new uptrend.
Ren price technical analysis: daily chart
REN’s price has a history of strong rallies, followed by equally sharp declines where the pair does a complete retracement of the previous rally.
After such a rally and correction, the pair again started a new up-move in mid-July 2021 which faced strong resistance at the 61.8% Fibonacci retracement level of the previous decline.
The pair is in a strong correction and a break and close below $0.49 could pull the price down to $0.27, completing a 100% retracement of the latest leg of the up-move.
A minor positive development on the charts is that the relative strength index (RSI) is showing signs of forming a positive divergence.
If the price turns up from the current level and breaks above the downtrend line, it will suggest that the correction could be over. The pair could then rise to $1 and if this level is crossed, the next stop could be $1.22.
Ren: buy or sell at current levels?
The REN price analysis suggests that the pair could drop to $0.27 if the $0.49 support gives way. This negative view will invalidate if the price turns up from the current level and rises above the downtrend line. That could start a new up-move to $1 and then to $1.22.
The views and opinions expressed in the article are those of the author, and do not constitute trading advice. Trading and investing involve substantial risks, and you should do your own research or contact your financial adviser before arriving at a decision.