Tomochain’s (TOMO) Rejection Casts Doubt On Bullish Prospects

TOMO Holds on to Support

The TOMO price reached a high of $1.55 on Aug 13, but dropped significantly shortly afterward, culminating with a low of $0.52 on Sept 5.

The price then bounced and reached a high of $1.20 on Sept 30 but dropped sharply once more. This move served to validate the $1.15 area as resistance.

However, the price is still trading above an ascending support line that it has been following since reaching a bottom on March 13, and is trading above the $0.63 support area. As long as it does so, the possibility of continuation remains valid.

Despite the considerable support below the current price, technical indicators on the daily time-frame have turned bearish.

• The MACD has crossed back into negative territory.
• The RSI is trading below 50.
• The Stochastic Oscillator has made a bearish cross.

Therefore, any price rallies are considered corrective, while the main trend is considered bearish.

Short-Term Movement

Cryptocurrency trader @tradingtank outlined a TOMO chart, stating that as long as the price manages to hold on above the $0.75 support, he expects an upward move towards $0.959.

However, since the tweet, the price has fallen below both the $0.75 and $0.70 support areas. After attempting to initiate an upward move, TOMO was rejected by the $0.70 area.

Technical indicators show that the move has lost strength, and a fall towards the range low at $0.65 is likely.

Wave Count

Since the previous Aug 13 high,  the TOMO price seems to have begun a complex W-X-Y corrective structure (shown in black below), currently trading in wave Y.

Since the W wave is created by three subdivisions and X did not retrace more than the 0.618 Fib level, the correction is a W-X-Y instead of an A-B-C.

The Y wave is comprised of another A-B-C correction (orange), in which the price is still in the A wave. We can outline a bearish impulse (blue) for the A wave, which gains more validity due to a lack of overlap (red solid line).

Therefore, the price should decline to $0.50 before beginning a corrective move up. Due to Elliott wave rules, more specifically the fact that wave 3 cannot be the shortest, a fall that would take the price lower than $0.50 would invalidate this particular wave count.

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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.

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