Harmony one is going up! Technical analysis + trade plan by BFChart Overview
Timeframe: 4-hour (Binance Exchange)
Price as of Analysis: $0.01346
Volume: 3.744 million ONE
Formation: Falling Wedge pattern
Chart Patterns and Indicators:
Falling Wedge:
A falling wedge pattern is typically a bullish reversal pattern, indicating that the current downward trend is weakening and a potential breakout to the upside could follow.
The narrowing of price action shows a decline in both support and resistance levels, with lower highs and lower lows.
The breakout is anticipated above the wedge resistance, potentially marking the beginning of an uptrend.
The VMC Cipher B indicator is similar to the MACD and shows signs of bullish divergence, meaning that while the price has been declining, momentum is building for a potential reversal.
The RSI is hovering around 50.25, which is neutral but can indicate momentum is shifting. If RSI starts increasing above 55, it will confirm bullish momentum.
Stochastic Oscillator is currently at 35.30, this shows the asset is near the oversold zone but still in neutral territory. A move above 40 may confirm a bullish trend reversal.
The HMA histogram shows early signs of turning bullish as the color changes and bars are in the process of shifting positive.
Volume has decreased over the wedge formation, which is typical of such patterns. An increase in volume after the breakout will serve as confirmation for a stronger upward move.
Potential Price Targets:
Immediate Resistance: $0.01360 - This is the wedge resistance. A breakout above this level confirms the pattern.
First Target: $0.01550 - Based on previous price levels, this area is the next resistance once the breakout occurs.
Second Target: $0.01750 - This aligns with the previous significant high and could be a target after the first resistance.
Risk Factors:
Stop-Loss: It’s crucial to place a stop-loss below $0.01200 (below the previous support levels) to manage risk in case of a false breakout.
Volume Confirmation: Ensure that the breakout occurs with significant volume, as low-volume breakouts may lead to a reversal back into the wedge.
Trading Plan
1. Entry:
Enter a long position after a confirmed breakout above the $0.01360 resistance with strong volume confirmation. A 4-hour candle close above this level should confirm the breakout.
2. Stop-Loss:
Place a stop-loss slightly below $0.01200 to manage the downside risk in case the falling wedge pattern fails and the price reverses.
3. Profit Targets:
First Target: Set a take-profit around $0.01550 to capture the first major move after the breakout.
Second Target: For those with a higher risk appetite, target $0.01750, which aligns with the next resistance.
4. Position Size:
Risk only 1-2% of your trading capital on this trade. Given the potential volatility and the falling wedge pattern, it's essential to manage position size conservatively.
5. Monitoring:
Keep an eye on the volume and the RSI/Stochastic Oscillator. If RSI rises above 55 and Stochastic confirms the upward movement, the breakout should gain more strength.
Monitor for any potential fake breakouts. If the price fails to close above the resistance on the 4-hour chart, consider delaying the entry until clear confirmation is given.
The Harmony (ONE/USDT) chart is showing a potentially bullish falling wedge formation, indicating that a reversal from the recent downtrend could occur soon. A breakout above $0.01360 with confirmed volume is crucial for confirming the uptrend. If confirmed, Harmony could target $0.01550 and $0.01750 in the near term, but it's important to employ tight risk management through proper stop-loss placement.
