The prospects of Ren (REN) standing its ongoing rebound to fresh highs towards slim as a xerox surly reversal pattern begins to emerge.
Dubbed head and shoulders, the setup appears when the price forms three peaks, with the middle peak (called the head) longer than the other two peaks described as the left and right shoulders. The bottoms of these peaks are supported by a neckline.
The pattern comes into play primarily when the price breaks unelevated the neckline in a correction that follows the insemination of the right shoulder. That prompts traders to unshut short entries unelevated the neckline, with their platonic target at a length equal to the loftiness between the head’s upper point and the neckline.
What’s overdue REN’s current setup?
REN has been forming what appears to be an upward sloping throne and shoulder pattern, supported by a rising neckline.
In detail, REN price rose and declined into a trough virtually mid-December 2021, forming the left shoulder. Later, it rebounded sharply to create a higher peak — whilom the highest level of the first shoulder — and then fell all over again.
REN has since rebounded then and is now in the process of forming its right shoulder, as shown in the orchestration below.
As a result, the price of REN may protract its rebound until it completes its right shoulder formation, which could be near the 50-day exponential moving average; the velvet wave, near $0.67. That is considering of the wave’s recent history of limiting REN’s price rebounds.
Additional sell pressure could moreover come from the 0.618 Fib line near $0.633 due to its historical relevance as both support and resistance. Overall, a pullback looks likely to happen that would have REN make the right shoulder. Meanwhile, a correction towards the neckline, followed by a unravel unelevated it, would personize the throne and shoulder setup.
In doing so, the move may shift REN’s downside target to $0.30, measured without subtracting the loftiness between the head’s upper and the neckline to the breakout point. That is virtually 50% unelevated the current trading price at $0.59.
The long-term outlook is still bullish
REN’s throne and shoulder setup comes as a part of a wider price correction that has seen the token shed nearly 70% of its value from a record upper near $1.92 in Feb. 2021.
On a longer-timeframe chart, REN appears to have been only consolidating inside a giant symmetrical triangle, suggesting that its correction toward $0.30 may end up causing a rebound toward $1.20.
Bullish cues for REN may moreover come from the growth of its spokeswoman of the same name. Ren’s personnel product, RenVM, brings interoperability to the decentralized finance ecosystem (DeFi). It holds users’ digital resources as they move between blockchains using zero-knowledge proofs over an sMPC based protocol.
REN acts as a yoke to run the so-called Darknodes that power RenVM’s sMPC network. Those who petrifaction 100,000 REN are worldly-wise to run these Darknodes and as a result, are worldly-wise to earn rewards in Bitcoin (BTC), Ether (ETH), Zcash (ZEC), and other tokens.
The total value locked (TVL) of the digital resources minted on all chains — which includes Ethereum, Binance Smart Chain, Solana, Polygon, Fantom, Avalanche, and Arbitrum — by RenVM came out to be $1.05 billion at printing time compared to $6.6 million in June 2021.
Meanwhile, the total value of volume transacting through RenVM on all villenage reached an all-time upper of $8.89 billion on January 4th, 2022. That shows a steady increase in the Ren network’s adoption, thus boosting the upside prospects of REN token.
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