The price of Synthetix (SNX) has rebounded from a significant support level. It may test the long-term resistance level at $3.4.
Recently, Kane Warwick, the founder of the decentralized synthetic asset protocol Synthetix, proposed a buyback and burn of millions of SNX tokens. This could have a positive impact on the price of SNX.
Key Support
The price of Synthetix (SNX) dropped after being rejected by the long-term horizontal resistance level at $3.4 on February 27, 2023. However, there is a positive sign as the price has bounced back twice from the previous resistance level at $2. The first time was marked by the formation of a bullish pin bar candlestick, and the second time was the formation of a bullish engulfing pattern (green arrows). Both are indications of buying pressure.
When we combine these two bounces, we see the formation of a double bottom pattern. This is a bullish pattern that often leads to a reversal of the trend to the upside.
Furthermore, it is supported by bullish divergence in the weekly RSI indicator, another bullish signal.
Therefore, the price of SNX is likely to recover from the current level and move towards the long-term resistance level at $3.4.
Descending Parallel Channel
The daily chart shows that SNX has been trading within a descending parallel channel since reaching the yearly high at $3.38. This is a bullish pattern that often leads to breakouts in most cases.
In fact, the price is currently trading near the upper boundary of the channel, further reinforcing this argument.
The RSI indicator also supports the possibility of a breakout as it reclaims the 50 level and is sloping upwards.
Conclusion
The most probable outlook suggests that the price of SNX will continue to rise towards the long-term resistance level at $3.4.
This view would be invalidated if the price breaks below the support zone at $2.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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