1inch (1INCH) is looking to break out from a long-term descending wedge after rising 48% from its June lows.
Since its all-time high of £6.43 in May 2021, the price of 1INCH has been declining. The decline has thus far resulted in a low of £0.42 in June 2022. This was a drop of 93% from the all-time high.
A descending wedge appears to have contained the entire decrease. A breakout from the descending wedge is thought to be the most likely outcome because it is a bullish pattern. Price is currently near the area where resistance and support meet, indicating that a significant move is imminent.
The closest resistance area, if a breakout occurs, is at £1.63.
Even though a bullish pattern is present, the weekly RSI is declining and is currently below 50, which is bearish. It dropped to a new record-low of 32 in June.
There are no definite indications on the daily chart as to whether the price will move upward or downward. The RSI remains below 50, and the price is trading below the small £0.65 horizontal resistance area.
The resistance area’s significance is further increased by the fact that it lies on the wedge’s descending resistance line.
Therefore, for the trend to be deemed bullish, a breakout from the resistance level and an RSI advance above 50 are both necessary.
Though the price has already broken out from a descending resistance line, the six-hour chart is more bullish.
Additionally, the RSI has crossed 50 and the bullish divergence trendline is still there.
Therefore, a breakout from the long-term wedge is likely, as evident from a look at lower time
frames.
The price appears to be stuck in an A-B-C corrective structure since October 2021. If this is the case, waves A:C have a ratio of 1:0.5, which is not uncommon in such structures.
The count for the short term is similarly bullish.
According to the first hypothesis, the price may be in wave C of an upward A-B-C corrective structure.
A 1:1 ratio for waves A:C would result in a high of £0.72.
The second count indicates that the increase is actually a bullish 1-2-3-4-5 structure. In that case, 1INCH will rise towards the previously aforementioned £1.63 resistance area.
Which is the correct count will depend on how the upward movement is now shaped.