ICON (ICX) Makes Attempt at Breaking Out From 237-Day Resistance

Source : beincrypto.com

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ICON (ICX) could soon make another attempt at breaking out from its short-term pattern, and potentially break out from its long-term one in the process.

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ICX has been decreasing alongside a descending resistance line since March 31. Therefore, the line has been in place for 237 days. 

Since Oct 5, the token has been rejected four times by the line, which also coincides with the $2.55 resistance area. 

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Resistances get weaker each time they are touched. Therefore, judging by this, an eventual breakout would be expected. 

However, technical indicator provide a very neutral outlook. 

The MACD, which is created by a short- and a long-term moving average (MA), is decreasing, even though it is still positive. This means that the short-term MA is decelerating in relation to the long-term one, but it is still faster than it. 

The RSI, which is a momentum indicator, is right at the 50 line. This is a sign of a neutral trend, since movements above and below the 50 line are considered benchmarks for a bullish/bearish trend.

As a result, a look at lower time-frames is required in order to determine if ICX will break out.

Chart By TradingView

Cryptocurrency trader @TheEuroSniper outlined a weekly ICX chart, which shows that the token is attempting to reach a new yearly high. The horizontal resistance area nearly coincides with the descending resistance line, further strengthening the level.

ICX long-term
Source: Twitter

Short-term ICX breakout

The shorter-term six-hour chart is more bullish, indicating that a potential breakout is likely. 

ICX has been trading inside an ascending triangle since Sept 30. The ascending triangle is considered a bullish pattern.

Furthermore, today’s bounce has been combined with bullish divergence in both the RSI and MACD. This means that the price decrease was not accompanied with a similar decrease in technical indicators. This occurrence often precedes bullish trend reversals. 

Therefore, according to the six-hour chart, an upward movement towards the resistance area and then a breakout are likely.

ICX triangle
Chart By TradingView

Wave count

The most likely count suggests that ICX is in wave two of a five wave bullish impulse (yellow). Wave two is corrective, meaning that after it is complete, the upward movement is expected to resume.

The exact shape of wave two is not yet clear. It is possible that ICX is trading inside an ascending parallel channel. If so, it is currently close to the support line of this channel. 

Therefore, after another touch of the line, the upward movement would be expected to resume. In turn, this would cause a breakout from the long-term descending resistance line.

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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto’s Senior Analyst.

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