Theta price tone deafens bulls, as THETA searches for a conclusive low

Theta price collapsed over 27% overnight, taking the token below the 50% retracement level of the rally from the 2020 low to the recent high and down to the double top measured move target at $7.36. In the short-term, the 50-day SMA may be a magnet for the price, but the lack of an oversold reading at this point projects a return to today’s low at least.

Theta price shows that a dull market disguises problematic technicals

Bears came out of the caves overnight to drive THETA down over 27% before reaching support near the measured move target of $7.36. The ensuing rebound has the digital token back near the 50-day SMA, but more weakness is likely in the future.

A good gauge of a low is when the daily or even weekly Relative Strength Index (RSI) falls below 30, into oversold territory. It is called the momentum low, but it does not mean a price low. Often prices drift lower for a few days before commitment and emotion take control of the instrument and push it higher. It is expected that a similar fate awaits THETA moving forward. The altcoin needs to print a momentum low and a price low to completely release weak holders from the ranks. 

Support levels for a renewed THETA sell-off include the 50% retracement level at $8.32, the measured move target at $7.36, and, more importantly, the convergence of the 100-day SMA at $6.45 with the 61.8% Fibonacci retracement at $6.36. Any further weakness will need to respond to the 78.6% retracement at $3.58. This would result in a big blow to a 2021 performance leader.

THETA/USD daily chart

A daily close above the 50-day SMA at $10.20 will flip the attention to the double bottom trigger at $11.07 as significant resistance. Similarly, a daily close above $11.07 would turn the THETA working thesis to neutral and raise the odds of testing the 2021 high at $16.61.