SXP Consolidates in Anticipation of Breakout

The consolidation should come to an end soon with SXP beginning another upward movement towards the resistance areas outlined below.

Breakout From Long-Term Resistance

The SXP price has been increasing since it reached a low of $0.69 on Nov. 3.

On Nov. 17, the SXP price broke out from a descending resistance line that had been in place since Sept. 4. However, the ensuing upward movement was short-lived since SXP was rejected at the $1.10 resistance area before falling.

At the time of writing, the price had validated the previous descending resistance line and was trading between $0.75 and $1.10.

A breakout above the latter would take the price towards the next resistance area at $2.30, while a breakdown would take SXP to an all-time low and into price discovery.

Despite the breakout and retest, technical indicators are neutral, leaning on bearish. The RSI is below 50, the MACD is below 0, and while the Stochastic Oscillator has made a bullish cross, it is moving downwards.

Future Movement

Cryptocurrency trader @Tradingtank tweeted an SXP chart that shows heavily increasing volume during the most recent rally, suggesting that the price is getting ready for an upward move.

Despite the relative bearishness from indicators on the daily time-frame, lower time-frames paint a different picture.

Both the MACD and the RSI have formed bullish divergence, though, it’s not significant at this stage.

However, when combined with the consolidation above the $0.95 support area, an upward move seems likely.

If the price manages to break through the $1.10 resistance area, the rate of increase is likely to accelerate.

Wave Count

While it’s not clear yet if SXP is in a corrective structure or if it has begun an impulse, it’s very likely that it has completed a flat corrective structure (highlighted in black). However, the structure could have either been an X wave or a 2 wave.

Since a corrective structure looks more likely, SXP seems to be in the Y wave of a W-X-Y corrective structure (orange), which should take the price at least to $1.40 and possibly to the $2.37 long-term resistance area outlined in the first section.

A rally above this level would suggest that SXP has begun a new bullish impulse instead of a corrective structure.

Conclusion

To conclude, the SXP price should complete its consolidation and soon begin to move upwards towards the first resistance area at $1.40.

For BeInCrypto’s previous Bitcoin analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto

The post SXP Consolidates in Anticipation of Breakout appeared first on BeInCrypto.

Source