Disclaimer: This is for informational and entertainment purposes only. I am not a professional trader, and this is not financial advice, but I do enjoy staring at charts and drawing lines from time to time. Behind the paywall you will find a screenshot of the XEC chart on the daily timeframe and some thoughts on what it could be signaling.

Looks like a descending or falling wedge pattern to me, which forms when “price action shows lower highs and lower lows, but the downward slope of the lower trendline is steeper than the upper trendline, indicating a narrowing price range. This narrowing suggests decreasing sell pressure and a potential for a breakout to the upside. Another way of looking at it is that as the price falls, buyers absorb the selling pressure and slow the downward momentum. The pattern often resolves with a decisive price increase, as buyers overwhelm the sellers.”

The chart also shows bullish divergence with the Relative Strength Index (RSI). This is a “signal that weakening downward momentum may lead to a potential upward price reversal. It is identified when an asset’s price chart makes a lower low, but the RSI indicator forms a higher low.”

XEC trading volume has also steadily decreased over the past 2 months, which can mean sellers are losing conviction, and there is also a potential golden cross forming with the 200 day and 50 day moving averages (red and green lines in chart) close to each other. They nearly crossed towards the end of August before being rejected.

The pattern looks as if it will resolve itself within the next 2 weeks. Considering the eCash Conference is scheduled to kick off on October 4th with many anticipating the announcement of the long awaited Avalanche pre-consensus upgrade, could this be a case of buy the rumor, sell the news? Only time will tell.

Hope you enjoyed this analysis. Let me know in the comments what you think.

Are you predicting an XEC break out to the upside, or to the downside?

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