Hello my fellow chart watchers!
Did a little rebrand of our SPS tracking blog so it isn't boring when searching for it. Let's hope it brings in more viewers! :) Anyway, on to what's happening with SPS price action today!
Zooming Out: Testing Key Market Structure
Looking at SPS on a daily timeframe, we had a relief rally early on but unfortunately we are now testing the support levels we've been holding on to for the past 3 days, which also coincides with the EMA 55 currently at 56 cents.
Some of you may be wondering, are we headed to zero? All I can tell you is whenever we test support levels across cryptos, stocks, or others, it NEVER FEELS like we're able to hold it. But unless we see daily or weekly closes below the structure, support levels still hold.
If we're able to hold it, this is a very bullish sign because it gives confidence to all traders that this is a solid floor to keep stacking SPS. But nonetheless, let's prepare for either scenario by looking at lower timeframes to see what's going on.
The Battle At The Descending Triangle
On a 4 hourly timeframe we can clearly see that we're currently charting a descending triangle structure. Typically, this is a bearish pattern, but it doesn't always breakout to the downside. The things to note with these patterns are:
For the bullish case: we want to see a clear break of the triangle's hypotenuse. When that happens, there's a breakout technical price target, based on the height of the triangle where the candle touches the highest point. In our example, if it breaks out 2 candles from now, the target is at 65.689 cents.
For the bearish case: if we fall from the horizontal support line of 56 cents, the same technical target applies, but this time to the downside. In this case, if the bears win, our new price targets will be at 50.8 cents first (because that was the swing low the last time we were here), but eventually fall down to 48 cents.
If you want to see some nice orderbook nerd action, check SPS out at gate.io and look at the order books. It's a nice way to see where the buy and sell walls are.
HODL on everyone! We'll get through this storm soon.