OMGBTC formed another bullish reversal move
Hey, friends hope you are well and welcome to the new update on OMG token. Recently the price action of OMG has started the correction rally after a massive bullish wave of more than 1000%. So in today's post, we will try to understand that whether is this a really correction rally for the price action will move more down.
Is this a breakout or fake out:
Since 3rd week of August 2020 the priceline of OMG token started moving within the down channel. We can see several touches at the support and on the resistance as well. Finally on 11 September the price action broke out the resistance of the channel. I've also placed the volume profile indicator on the complete priceline moving within this down channel. It can be clearly observed that as per volume profile trader’s interest was very weak at the support of the channel. Even the trader's interest went above the resistance of the channel that was a very clear signal for the break out. We can also see the point of control of the volume profile at a very high distance from the resistance of the channel that can pull the priceline up very soon. Now the price action is likely to move down to re-test the previous resistance of the channel as a support but I am expecting that the price action will again enter in the channel and there is a very strong reason behind this thinking and that is the expected harmonic move.
The priceline has broken down the 1st SMA support:
After placing the different simple moving averages with the time period of 25, 50 and 100 it can be easily seen that the price action has also broken down the 25 simple moving average. Now price action of OMG is moving between the 25 and 50 SMAs. If the 50 simple moving average will be broken down then we also have the 100 simple moving average strong support below the 50 SMA.
Harmonic BAT move:
There are strong chances that the price action will use the 50 simple moving average as a support and to do so the priceline of OmiseGo will move more down. Because if we take a closer look at the chart then it can be clearly seen that the price action is likely to complete the final leg of the bullish BAT pattern on the daily chart. After initial X to A leg the price action is retraced between 0.382 to 0.50 retracement level then candlesticks are projected between 0.382 to 0.886 Fibonacci projection of A to B leg this is the second confirmation for the bullish BAT. Now the price action can retrace between 0.786 to 0.886 Fibonacci retracement level for the completion of this bullish BAT move. According to some trading experts, the potential reversal zone of the bullish BAT can be started from 0.618 Fibonacci retracement level. Therefore according to this theory if the price action will be moved up from this level where it moving at the moment even then the bullish BAT will not be invalidated. Because so far the priceline has retraced up to 0.724 Fibonacci that is more than 0.618 Fibonacci level.
A big bullish Shark move and it’s buying and sell targets:
At the end I would like to recall a very big bullish Shark move that has been completed by the priceline of OMG token. I posted the below pattern last year in April 2019.
Now finally the price action is gearing up from the potential reversal zone of bullish Shark and as per Fibonacci sequence of this pattern the buying and sell targets are as below:
Buy between: 0.000604 to 0.000230 btc
Sell between: 0.001079 to 0.001977 btc
Conclusion:
On the long-term the price action of OMG token has formed a very big harmonic move and has the potential to produce more than 750% bullish rally. However, on the short term the price action can move little bit more down for the completion of the bullish BAT. Therefore we can use the potential reversal zone of bullish BAT on the short term as our stop loss.
Is this a breakout or fake out:
Since 3rd week of August 2020 the priceline of OMG token started moving within the down channel. We can see several touches at the support and on the resistance as well. Finally on 11 September the price action broke out the resistance of the channel. I've also placed the volume profile indicator on the complete priceline moving within this down channel. It can be clearly observed that as per volume profile trader’s interest was very weak at the support of the channel. Even the trader's interest went above the resistance of the channel that was a very clear signal for the break out. We can also see the point of control of the volume profile at a very high distance from the resistance of the channel that can pull the priceline up very soon. Now the price action is likely to move down to re-test the previous resistance of the channel as a support but I am expecting that the price action will again enter in the channel and there is a very strong reason behind this thinking and that is the expected harmonic move.
The priceline has broken down the 1st SMA support:
After placing the different simple moving averages with the time period of 25, 50 and 100 it can be easily seen that the price action has also broken down the 25 simple moving average. Now price action of OMG is moving between the 25 and 50 SMAs. If the 50 simple moving average will be broken down then we also have the 100 simple moving average strong support below the 50 SMA.
Harmonic BAT move:
There are strong chances that the price action will use the 50 simple moving average as a support and to do so the priceline of OmiseGo will move more down. Because if we take a closer look at the chart then it can be clearly seen that the price action is likely to complete the final leg of the bullish BAT pattern on the daily chart. After initial X to A leg the price action is retraced between 0.382 to 0.50 retracement level then candlesticks are projected between 0.382 to 0.886 Fibonacci projection of A to B leg this is the second confirmation for the bullish BAT. Now the price action can retrace between 0.786 to 0.886 Fibonacci retracement level for the completion of this bullish BAT move. According to some trading experts, the potential reversal zone of the bullish BAT can be started from 0.618 Fibonacci retracement level. Therefore according to this theory if the price action will be moved up from this level where it moving at the moment even then the bullish BAT will not be invalidated. Because so far the priceline has retraced up to 0.724 Fibonacci that is more than 0.618 Fibonacci level.
A big bullish Shark move and it’s buying and sell targets:
At the end I would like to recall a very big bullish Shark move that has been completed by the priceline of OMG token. I posted the below pattern last year in April 2019.
Now finally the price action is gearing up from the potential reversal zone of bullish Shark and as per Fibonacci sequence of this pattern the buying and sell targets are as below:
Buy between: 0.000604 to 0.000230 btc
Sell between: 0.001079 to 0.001977 btc
Conclusion:
On the long-term the price action of OMG token has formed a very big harmonic move and has the potential to produce more than 750% bullish rally. However, on the short term the price action can move little bit more down for the completion of the bullish BAT. Therefore we can use the potential reversal zone of bullish BAT on the short term as our stop loss.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.