- Attempts by the theta price to continue the massive rally are frustrated by the weight of the falling 50-day Simple Moving Average (SMA).
- THETA closed the week down -6.17% and -11.64% in July, marking the fourth consecutive negative monthly return.
- A bullish golden cross pattern is triggered on the six-hour chart when the six-hour SMA 50 approaches the six-hour SMA 200.
Theta price rebounded over 100% from July 20 low to July 26 high, slightly outperforming most cryptocurrencies after trading well below the 50-week SMA. Since July 26th, THETA has been slowed down by the weight of the falling 50-day SMA to now US $ 6.16. The consolidation process has drawn a symmetrical triangle on the six-hour chart, with the potential to push the altcoin to the 200-day SMA at $ 7.14.
Theta price compressed, looking for symmetry for the next higher leg
At the July 20 low, theta price had entered an oversold condition on the daily Relative Strength Index, which formed the basis for the massive 100% surge over the next six days. The THETA rally quickly overcame resistance attributed to the May 23rd low of $ 4.54 and the June 22nd low of $ 5.21 before briefly trading above the 50- and 200-day SMAs .
The resulting price compression created by the sharp rise is released as the theta price consolidates below the tactically important 50-day SMA. The sideways price movement has formed a symmetrical triangle with a measured movement of 18% on the THETA six-hour chart.
One potential factor in the symmetrical triangle resolution is the approaching bullish golden cross pattern on the six-hour chart. It could steer a bullish dissolution of the pattern and a continuation of the theta price rally to the 200-day SMA.
THETA / USD 6-hour chart
The measured 18% movement of the intraday symmetrical triangle places the theta price above the 200-day SMA but not above the July 26 high of $ 7.60. Instead, THETA will be stranded in a price range that includes the April 23 low and several highs in late June.
Contributing to the intensity of the resistance is the April descending trendline that is currently crossing the 200-day SMA. Thus, a successful break out of the theta price range between $ 7.14 and $ 7.75 may require more than one attempt, confirming that easy money has been made with THETA.
The theta price above $ 7.75 may move into a new price range framed by a series of highs in May and June between $ 9.70 and $ 10.80, which is a 50% increase Returns versus the 200-day SMA.
THETA / USD daily chart
Consolidation may continue, but theta price must hold the June 22nd low of $ 5.21. Otherwise, THETA could fall to the May 23 low of $ 4.54 or the 78.6% Fibonacci retracement of the 2020-2021 spike at $ 3.58, a 30% decrease from the 22nd low. June recorded.
In conclusion, it must be pointed out that due to the position of the theta price within the larger price structure, THETA is not in the best position. Yes, it held the 50-week SMA two weeks ago, but it trades below the major daily moving averages and is negatively impacted by the recent bearish death cross pattern than the 50-day SMA below the 200-day SMA fell. All provide headwinds for a bullish outlook.
In the short term, there is a high probability that the theta price can resolve the symmetrical triangle upwards and hold the measured movement of 18%. However, more significant THETA returns will be a fight that cannot be won without multiple tries.