Both the INJ/USD and RUNE/USD pairs have broken out in favour of these altcoins over the last week. Can they both break the downtrend, or could the BTC/USD pairing break down and turn these altcoin price movements into a fake-out?
Some of the outperforming altcoins have broken their respective descending trend lines over the last week. Injective Protocol ($INJ) and Thorchain ($RUNE) are among the stronger altcoins from the pack. Can they go higher, or is Bitcoin about to signal a lower high, and pull the altcoins back down with it?
$INJ breaks out of the descending wedge
Source: TradingView
On the daily time frame for the $INJ price it can be observed that a break of the descending trend line occurred a week ago. The price broke out of a wedge pattern it had been observing since early March this year.
The good news is that the bulls just about managed to drag the price slightly higher than the last local high, meaning that the higher high has been achieved.
Now it appears that the price has been rejected from the $23 horizontal resistance level, and is now heading downwards, to what the bulls would hope will be a higher low.
The Fibonacci levels line up nicely with support and resistance lines, and it just remains to be seen at which level the price will bounce at. Given that the daily Stochastic RSI is rolling over, signalling reduced upside price momentum; and there hasn’t been a retest of the top of the wedge yet, the price could come down to the 0.382 Fibonacci and shoot a candle wick down for that retest. Alternatively, it could come all the way down to the 0.618 Fibonacci, at $17.20, giving the Stochastic RSI time to bottom and then cross back up.
$23 resistance level needs to be broken
Source: TradingView
Moving out to the weekly chart, it can be seen that the $INJ price is holding support around its current price of $21.35. The rejection came from the first Fibonacci level at $23. If the price can break this level, the next targets would be $28.50 at the 0.382 Fibonacci, $37.80, at the 0.618, and $44.50 at the 0.786.
$RUNE makes a higher high
Source: TradingView
The $RUNE price is in similar circumstances to that of $INJ, in that it has broken its descending trend line, and has just about managed to make a higher high. It looks like the price might be rejected from the resistance at $4.95, and if so, the Fibonacci support levels are below; first at $4.50 and then at $4.
$RUNE must break the horizontal resistance at $4.95
Source: TradingView
Zooming out into the weekly time frame, it can be noted how important it is for $RUNE to break the current horizontal resistance. The Stochastic RSI is signalling large upside momentum, but this is likely to top out in the next week or so. The bulls will be hoping that the resistance has become support by this time. Upside targets are the overhead resistance levels at $7.40, and at $8.95.
Meanwhile, the Bitcoin price will also need to climb higher. This is the main catalyst for both $INJ and $RUNE to see further positive price action.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.