Like every Crypto Nugget on Wednesday, let’s take a look at the charts to analyze an asset selected by you on our social networks. Today’s winner is UOS, the main asset of the ULTRA project. Investors are waiting for access to the general public of the platform and the arrival of new features, UOS seems to be in difficulty to resist the decline. In fact, this reasoning applies to the vast majority of cryptocurrencies on the market. But then, does the asset have enough to recover in the coming weeks? This is what we will see in this new technical analysis.
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The pending UOS asset
After a long period of accumulation from September 2019 to July 2020, UOS exploded higher by registering numerous highs, which allowed it to register a all time high at $2.49. However, like the rest of the market, UOS suffered the brunt of the decline in the financial markets. Recently it broke a support zone which was former resistance, which demonstrates the strength of sellers facing buyers.
On this weekly scale, you can see the strength of the downtrend with the listing of troughs and descending peaks. The recent bearish wick stopped at the same level as a former low. There is therefore a EQL (Equal Low) below which the price will have to seek liquidity. On the higher levels, you can see a supply area and several FVG (Fair Value Gap) that formed in the previous weeks. The ideal scenario would be a return to supply area before continuing down. However, I do not favor this scenario. Why ?
The macroeconomic context does not bode well for a lasting recovery in assets risk-on like cryptocurrencies, quite the contrary. Thus, it seems to me far too optimistic to envision a return to $1.22. As part of the downtrend, we must have in our sights, besides the equal low at 0.29 dollarthe demand area (supply area) weekly at $0.168 on which the price will likely come for a little ride. But before that, it is possible that UOS will make a short stopover in the 0.20/0.21 dollar area.
Price compression with low volatility
On the daily time frame, you can see how the price reacts on the levels identified on the upper time frame. Coming back to scenario of a UOS bullish rebound, how far could we envisage a return of the price? Since a return to the supply area does not seem to be on the cards, the current price compression could potentially result in a bounce up to $0.54 in order to fill a Weekly FVG. At best, we can have the bottom of the technical area at $0.67 in our sights. However, I fear that a return to higher levels, especially for an altcoin, seems unlikely given the current market.
After a potential return to these levels, the trend would still be bearish on a weekly scale. However, the price can also continue lower without establishing an upward correction, which would demonstrate the strength of the sellers despite several weeks of decline. So what should we consider next? First, a return of the price below the Equal Low at $0.29.
Thereafter, the price should continue its decline with a return, sooner or later, to the weekly demand zone so that the big wallets can close their losing orders. On this technical zone, the price will probably react by sideways. At this time, it will be necessary to monitor the price structure. Will we see an accumulation that will materialize in a bullish rebound? Or, will we be dealing with a new distribution (at the next local top) which will result in a continuation of the downtrend? Let’s be on our toes to be prepared for possible scenarios, when it is necessary to make a decision.
The gaming token in force against bitcoin
To complete our analysis of Ultra (UOS), I find it interesting to take a look at the chart against bitcoin. This determines the situation of the altcoin against the king of cryptocurrencies, if he is in a position of strength or not. Currently, after an all time high at 4,500 Satoshis, the UOS has come back to the levels of October 2021. This is a key zone on which it has bounced to continue to outperform at the end of last year. This zone, which is at 1,000 Satoshis, should not be lost if UOS does not want to follow the line of previous weeks: an underperformance against bitcoin.
Can we envision a rebound in the asset ? Yes, it is possible that UOS tries to hold itself by returning to 1,845 Satoshis (lower limit of the upper gray zone). However, the trend would still be bearish on a weekly basis with a trough and a descending peak, which does not bode well for the gaming sector token.
The challenge lies in the area of 1000 Satoshis that we have just mentioned. A loss of the latter will lead to UOS weakness in the cryptocurrency market. If bitcoin is set to fall, UOS will be much more fragile. Conversely, a rise in bitcoin will not result in incredible performance of the asset concerned. Thus, two other levels will be monitored in the event of a downward shock:
Here we are at the end of the analysis of the UOS! Currently in a situation of price compression, volatility will be back very soon! From now on, you have in your hands all the key levels to monitor, whether against the dollar or bitcoin. The fragile macroeconomic context and the sidelining of risk-on assets should alert you to one point: you must manage your risk as well as possible by paying attention to the positions taken on altcoins. Small bullish bounces may occur, but the underlying trend is still bearish for the whole market. There is, for the moment, no sign of a reversal of the price over the long term.
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