Theta price faces magnet effect, which could propel it higher

Theta price has stalled in the past six hours, but the weakness does not diminish the bullish outlook. The measured move target at $9.80 and the important $10 level remain within the advance’s grasp.

Theta price aims higher

Monroe Trout, a successful hedge manager, liked to trade the ‘magnet effect’ - markets’ tendency to get to round numbers. It proved to be a highly profitable strategy for Trout, and it has proven valuable on many different financial markets, whether it be equity indexes, individual stocks, or currencies.

During the five-day symmetrical triangle formation, only two of the 18 down candlesticks were on above-average volume on the 4-hour chart. Such market behavior demonstrated that the notable rally in Theta during 2021 is far from being a pump-and-dump story.

Today’s intraday weakness is simply a technical reaction to the slight overbought condition on the Relative Strength Index (RSI). After releasing some of the pressure, Theta will likely advance to the measured move target of $9.80, representing a gain of 13% from the current price level.

Investors must be prepared for the magnet effect to come into play, which will lift THETA to $10. The more patient traders may be rewarded with a test of the 2.618 Fibonacci extension level at $11.

LINK/USD 4-hour chart

If the intraday weakness accelerates, the first support is the symmetrical triangle high at $8. The next important level is the 50 four-hour simple moving average (SMA) at $7.30. It provided support on March 17, right before the breakout. 

A more dramatic decline will take Theta price down to the low of the symmetrical triangle at $6.20.