RUNE investors can take advantage of the breakout of the alt pattern by taking this position
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and represents the opinion of the author only.
RUNE saw a convincing reversal from the Fibonacci level of 23.6% over the past day. Buyers were inclined to cross the boundary of the EMA ribbons. But the bears had not yet given up their long-term advantage.
Meanwhile, friction between buyers and sellers at the checkpoint (POC, red) may continue to exist as the market structure redefines. At press time, RUNE was trading at $2.576, down 11.69% in the past 24 hours.
RUNE daily chart
RUNE has been weakening on the chart since early April. After witnessing several strong bulls, sellers have continued to find cooler lows over the past month.
RUNE lost nearly 90% of its value from (April 1) and plunged to its 17-month low on June 18. But the ongoing selling situation eventually saw a cooling near the $1.4 area. As a result, the alt has seen an ascending (white) channel over the past few weeks.
This upward trajectory may now see a slowdown near the 23.6% Fibonacci level in the $2.9 area. An inability by buyers to inflict a bullish crossover on the EMA ribbons could further hamper stimulus efforts.
Any closure below the ribbons could prolong the ongoing slow phase near the POC. Any break below the pattern could pull RUNE towards the $1.4-$1.6 range before a plausible recovery. Any bearish invalidation could see a ceiling near the $3.4 mark. However, traders should wait for a close above the 23.6% level for this target.
The Relative Strength Index (RSI) continued its hold in the bullish region while securing its bullish channel structure. Any reversal of this pattern could trigger a short-term setback on RUNE’s charts. This reading implied that potential losses were possible before the bulls regain their uptrends.
Additionally, the weaker spikes in On-Balance Volume (OBV) over the past few weeks have bolstered the chances of a strong bearish divergence with price. Despite the bullish edge, sellers could play spoilsport if the OBV continues its journey south. Nevertheless, the ADX represented a weak directional trend for the alt.
Given the immediate hurdle of the 23.6% level coupled with the ascending channel pattern, RUNE might see a short-term pullback. If the EMA ribbons undertake a bullish reversal in the daily timeframe, the longer-term trends could favor the bulls. The objectives would remain the same as those discussed.
Finally, investors/traders should closely monitor Bitcoin movements affecting the overall market perception.