The Graph (GRT) Approaches 363 Day Resistance Line


The Graph (GRT) has bounced considerably since its Jan. 24 lows, but has yet to reclaim a crucial horizontal resistance level. It has to do so in order for the trend to be considered bullish.

GRT has been falling since reaching an all-time high price of $2.88 on Feb. 12. Initially, it bounced at the $0.55 horizontal support area (green icon), and consolidated above it for 242 days.

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However, the price broke down on Jan. 17, and proceeded to reach a low of $0.34 on Jan. 24. Measuring from the aforementioned all-time high price, this amounted to a decrease of 87.69%. 

While GRT has bounced since, it is still trading below the $0.55 horizontal area, which is now expected to act as resistance. Furthermore, the area coincides with a long-term descending resistance line that has been in place for 363 days.

Short-term GRT movement

The six-hour chart shows that GRT has been trading inside an ascending parallel channel since Jan. 24. Such channels usually contain corrective movements, meaning that a breakdown would be the most likely scenario.

Most recently, the price was rejected by the resistance line on Feb. 7. This caused a downward movement that took GRT in the lower portion of this channel.

Wave count analysis

Cryptocurrency trader @Ewfib tweeted a chart of GRT, stating that the price is not yet done correcting.

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GRT Drop
Source: Twitter

There are two main possibilities for the wave count. 

The first suggests that GRT has completed its correction, since there are five waves down measuring from the Nov. 9 high.

Also, the Jan. 24 bottom was made right at the 1.61 external Fib retracement level of wave four (red).

In addition to this, GRT has broken out from the 2-4 trendline.

Alternative count
Chart By TradingView

The alternative count would suggest that GRT is currently in wave four of a five wave downward movement, after wave one extended. This is supported by the fact that the price is trading inside a short-term ascending parallel channel.

However, the invalidation level for this count is very close, being at $0.537 (black line), at the bottom of wave one.

Therefore, more information is required in order to determine the correct count. A reclaim of the $0.55 horizontal area would go a long way in suggesting that the correction is complete.

GRT five wave down
Chart By TradingView

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