Loopring has seen two massive rallies since the last week of October. Following a 450% surge to $1.9, LRC continued to rake in gains on the back of a bull pennant breakout. Furthermore, LRC had potential for another 135% upswing towards the breakout target set by the pennant’s flagpole.
Post a near-term correction stemming from an overbought RSI and a double top along the Awesome Oscillator, LRC would look to continue its price discovery. At the time of writing, LRC traded at $2.09, up by 36% over the last 24 hours.
Loopring 4-hour Chart
Following a bull pennant breakout, LRC had already captured 67% gains but was yet to reach to target at $5, which was set by the flagpole’s length. Now bearish divergences along the RSI combined with a weakening MACD suggested that LRC could take a step back before the next leg forward.
Near-term support at the 61.8% and 50% Fibonacci Extensions would be crucial in order to maintain LRC’s bullish outlook. Following a rebound, LRC would look to target another 135% upswing to fully realize its pennant’s potential.
To nullify this outcome, bears would need to target a close below the 50% Fibonacci Extension. Once the golden Fibonacci zone is lost, short-sellers can initiate further drawdowns back towards the $1-mark.
Even though the Awesome Oscillator noted a series of rising green candles, a potential double top was at play. A bearish divergence on the RSI along with its overbought nature was also a near-term threat. Finally, MACD’s histogram noted some receding bullish momentum over the past couple of sessions.
Several signs pointed towards a correctional phase for LRC before the price crosses above the 100% Fibonacci Extension. Once selling pressure is alleviated, expect LRC to make headway towards the 161.8% and 200% Fibonacci Extensions. From there, a few more retracements can set in before LRC achieves its final target at $5.