Like any 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 await access to the platform’s general public and the arrival of new features, UOS seems to be struggling to withstand the decline. In fact, this reasoning applies to the vast majority of cryptocurrencies on the market. But will 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 item
After a long period of accumulation from September 2019 to July 2020, UOS exploded higher registering numerous highs, allowing it to register a all time high for $2.49† However, like the rest of the market, UOS suffered the most from the decline in financial markets. Recently it broke a support area that used to be resistance, which demonstrates the power of salespeople towards buyers.
On this weekly scale you can see the strength of the downtrend with the mention of troughs and falling peaks† The recent bearish pit stopped at the same level as a previous low. So there is a EQL (Equal Low) below which the price will have to seek liquidity. On the higher levels you will see a supply area and several FVG (Fair Value Gap) that has formed in recent weeks. The ideal scenario would be a return to supply area before continuing down. However, I am not in favor of this scenario. Why ?
The macroeconomic context doesn’t bode well for a lasting asset recovery Risky like cryptocurrencies, on the contrary. So it seems far too optimistic to me to propose a return to $1.22. As part of the downtrend we should have in our sights, next to the equal low at USD 0.29the demand area †supply area) weekly for $0.168 on which the price is likely to come for a short ride. But before that, it is possible that UOS will make a short stopover in the USD 0.20/0.21 area.
Low volatility price compression
On the daily timeframe, you can see how the price reacts to the levels identified in the upper timeframe. Coming back to scenario of a UOS bullish rebound, to what extent can we foresee a return of the price? Since a return to the supply area does not appear to be on the cards, the current price compression could potentially result in a bounce of up to $0.54 to a Weekly FVG† At best, we could have our sights on the low end of the technical area at $0.67. However, I fear that a return to higher levels, especially for an altcoin, seems unlikely given the current market.
After a possible return to these levels, the trend on a weekly scale would still be bearish. However, the price may also remain lower without an upward correction, which would demonstrate the sellers’ strength despite several weeks of decline. So what should we think about now? First, a return of the price below the Equal Low of $0.29.
After that, the price should fall further with a return, sooner or later, to the weekly demand zone, allowing the major wallets to close their losing orders. In this technical zone, the price is likely to react sideways. At this point, it will be necessary to monitor the pricing structure. Will we see an accumulation materialize in a bullish rebound? Or will we face a new distribution (at the next local top) that will result in a continuation of the downtrend? Let’s be alert to be prepared for possible scenarios, when it is necessary to make a decision.
The gaming token in effect against bitcoin
To complete our analysis of Ultra (UOS), I find it interesting to look at the chart against bitcoin. This determines the situation of the altcoin against the king of cryptocurrencies, whether it is in a strong position or not. Currently, after a record high of 4,500 Satoshis, the UOS has bounced back to its October 2021 level. This is a key zone it bounced on to continue to outperform late last year. This zone, which stands at 1,000 Satoshis, should not be lost if UOS does not want to follow the line of previous weeks of underperformance against bitcoin.
Can we envision a recovery of the asset? † Yes, it is possible that UOS is trying to hold itself back by reverting to 1,845 Satoshis (lower boundary of the upper gray area). However, the trend would still be bearish on a weekly basis with a trough and a falling peak, which does not bode well for the token of the gaming sector.
The challenge lies in the area of 1000 Satoshis we just mentioned. A loss of the latter will lead to UOS weakness in the cryptocurrency market. If bitcoin threatens to fall, UOS will be much more vulnerable. Conversely, a rise in bitcoin will not lead to incredible performance of the asset in question. For example, in a downward shock, two other levels are followed:
Here we are at the end of the operating system analysis! Currently, in a situation of price compression, volatility will return very soon! From now on you have all the important levels in your hands to check, whether it be the dollar or bitcoin† The fragile macroeconomic context and the sideline of risky assets should remind you of one point: you need to manage your risk as best you can by paying attention to the positions taken on altcoins. Minor bullish bounces can occur, but the underlying trend is still bearish for the entire market. There is no sign of a long-term price reversal for the time being.
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