Loopring could suffer further losses as sellers were too strong at a crucial time
In February 2021, Loopring was trading below the resistance level of $0.87 and in July 2021 the price had fallen to $0.17. Later in November, Loopring rose to trade at $3.6, and in the months that followed, the price fell sharply. This long-term horizon gives us some context on how important the $0.8 to $0.9 zone has been held in the past. As of this writing, LRC is once again hitting the $0.87 support level. The short-term bias for the coin appeared to be bearish.
Using the swing high and swing low at $1.1 and $0.878, a set of Fibonacci retracement levels (yellow) have been drawn. Earlier this week, the 50% retracement level at $0.99 acted as resistance, and the price was rejected from $0.99. For a brief period, the $0.93 area (red box) acted as a demand zone, but the bulls in this area were quickly exhausted.
Subsequently, the price retested this area from below to confirm its swing into a supply zone. This suggested that the $0.92-$0.93 area, even when retested, would likely still be dominated by sell orders.
A bullish scenario would be a weekend above $0.93 for LRC, but that was unlikely as demand was not really there. The most likely scenario for LRC in the coming days was a decline, to the support level of $0.81. This level was also the Fibonacci extension level of 27.2%.
The RSI tentatively headed above the neutral 50 lines, while the Awesome Oscillator was also poised to climb above the zero line. This indicated that the bearish momentum had, at least temporarily, been stalled.
However, the CDV showed that the sales volume has remained stable in recent days. The rebound from the $0.86 area over the past few hours has had no noticeable buying volume.
The market structure was bearish and the $0.93 area was confirmed as a supply zone for the past few days. Due to the lack of demand from LRC recently, a move further south to $0.81 could materialize in the coming days.
Warning: The conclusions of this analysis are the sole opinions of the author and should not be taken as investment advice.