Star of the day: the STORJ token rallied by 70%, but everything is not so rosy
Date: 2023-07-06 Author: Karina Ziganova Categories: BLOCKCHAIN
Storj (STORJ) broke through the long- and short-term downward resistance lines, significantly accelerating the pace of growth on July 4. At the moment, the price increased by 70% in less than two days.
Although the long-term trend is decidedly bullish, the short-term indicators of STORJ promise the price first a pullback and only then the resumption of the upward movement.
STORJ broke through long-term resistance
STORJ is the token of the Storj Labs project, which positions itself as a "convenient, affordable, and secure decentralized cloud storage." As the results of the technical analysis of the weekly chart show, the price of the coin has been declining along the downward resistance line since November 2021. The result of the drop was a low of $0.21 achieved in June 2023. Almost immediately afterward, STORJ made a sharp bounce and has been growing ever since.
Further, on June 18, the price made a bullish breakout of the downward resistance line. At that time, the age of this line was 581 days. Although the price hit a new yearly high of $0.61, STORJ is now in the process of forming a long upper wick (red icon). Moreover, there is a risk of falling below the horizontal area of $0.48.
It is not yet clear whether this area will play the role of resistance or whether STORJ will take this barrier and turn it into support.
The weekly RSI supports continued growth. Traders use the RSI as a momentum indicator to assess whether a market is overbought or oversold and determine whether an asset is worth accumulating or selling.
Bulls have an advantage if the RSI values are above 50 and the trend is upward, and vice versa. In this case, the RSI index is above 50 and rising, indicating a bullish trend.
Moreover, the indicator gives very strong signals of bullish divergence (green line). Divergence on such a high timeframe is very rare and often precedes long-term bullish trend reversals, as happened with the STORJ rate.
STORJ Forecast: Rollback Before Continuation
While the weekly timeframe is bullish, the daily timeframe shows more mixed signs. On the one hand, on July 1, STORJ made a bullish breakout of the downward resistance line. The persuasiveness of the breakout was also supported by RSI signals, which rose above 50 and is growing.
However, the price failed to close above the horizontal area of $0.48. Instead, it has formed a very long top wick (red icon), which is considered a sign of pressure from sellers.
In addition, the previous bullish breakout can be considered a deviation, as the price failed to support the rise above the $0.48 area.
Thus, the long-term trend of STORJ is decidedly bullish. However, the direction of the short-term trend is likely to be determined by whether the price closes above or below the horizontal area of $0.48.
In the first case, we can expect an upward movement to the next long-term resistance at $0.90. If trading closes below the $0.48 area, it could trigger a drop to the next nearest support at $0.36.
