The chances of the price of REN continuing its ascension seem to be getting slimmer by the day as a classic bearish reversal pattern has emerged. Dubbed head and shoulders, this setup crops up when the price of the altcoin creates three different peaks, with the middle peak longer than the peaks on either side of it- which are referred to as the shoulders. The bottom of the peaks is naturally supported by something that is referred to as a neckline.
This pattern comes into play only when the price of the altcoin goes down below the neckline in a correction that would verily follow the formation put forward by the right shoulder. This does prompt traders to open their short entries below the neckline, with the main target set at a length that is quite equal to the distance between the high point of the head and the neckline presented.
What’s behind REN’s current setup?
Currently, REN has been creating what is usually considered to be an upward sloping head and shoulder movement- which is then supported by a rising neckline. In detail, the price of this altcoin rises and goes down into a trough around the middle of December, which then forms the left shoulder. After that, it went on to sharply create a higher peak- which would then go above the highest level of the first shoulder, after which it would fall down completely.
Ever since the fall, REN has managed to get back on track again and has started its process of forming its right shoulder yet again. As a result of this action, the price movement of REN may keep rebounding until it completes the formation of its right shoulder, which could be near the exponential average of 50 days- wherein the velvet wave is near $0.67. This would also be because of the recent history of the wave of limiting the price rebound of this altcoin.
Any additional sell pressure on REN may move the price down to $0.30, which would then be measured after adding the distance between the head’s high and the neckline to the point of breakout.