Loopring (LRC) bounced at a confluence of support levels on May 19 and has been moving upwards since.
It’s possible that LRC has completed a long-term correction and will eventually break out from the current pattern.
Long-term Loopring movement
LRC has been decreasing inside a descending parallel channel since Feb. 12. The movement inside has been gradual and choppy, indicating that it’s corrective.
On May 19, it reached the support line of the channel and the long-term $0.27 support area and bounced. This is a positive development since the same area previously acted as resistance prior to the breakout. So, it’s possible that the current decrease is just a bullish retest.
In addition to this, technical indicators are gradually turning bullish.
The MACD has already given a bullish reversal signal, and the Stochastic oscillator is very close to making a bullish cross (green). However, the RSI is still below 50.
Reclaiming the middle of the channel (dashed) would go a long way in suggesting that the correction is complete, as it would also cause the RSI to move above 50.
In that case, a movement towards the resistance line and eventual breakout from the channel would be expected.
LRC wave count
The entire movement after the Feb. 12 high looks like a completed flat correction. In it, waves A:C had a 1:1.61 ratio— a common pattern in such corrective structures.
Furthermore, the fact that the movement is contained inside a parallel channel further increases the possibility that this is a completed corrective structure.
As outlined above, an increase above the middle of the channel would support this scenario.
Cryptocurrency trader @Incomesharks outlined an LRC chart, stating that it’s showing bullish signs that could lead to an upward move in the short term.
Indeed, LRC has already broken out from a short-term descending resistance line. After validating it as support, it’s resumed its upward movement.
Both the RSI and MACD are increasing, affirming the validity of the breakout.
The main resistance area is at $0.48, nearly coinciding with the middle of the channel.
A breakout above it would likely confirm that the trend is bullish.