Are you bullish or bearish on Ren? The prospects of REN continuing its ongoing rebound to fresh highs appear slim as a classic bearish reversal pattern begins to emerge.
) continuing its ongoing rebound to fresh highs appear slim as a classic bearish reversal pattern begins to emerge., the setup appears when the price forms three peaks, with the middle peak longer than the other two peaks described as the left and right shoulders. The bottoms of these peaks are supported by a neckline.The pattern comes into play primarily when the price breaks below the neckline in a correction that follows the formation of the right shoulder.
In detail, REN price rose and declined into a trough around mid-December 2021, forming the left shoulder. Later, it rebounded sharply to create a higher peak — above the highest level of the first shoulder — and then fell all over again.REN/USD daily price chart featuring H&S setup. Source: TradingViewmay continue its rebound until it completes its right shoulder formation, which could be near the 50-day exponential moving average; the velvet wave, near $0.67.
Additional sell pressure could also come from the 0.618 Fib line near $0.633 due to its historical relevance as both support and resistance. Overall, a pullback looks likely to happen that would have REN make the right shoulder. Meanwhile, a correction towards the neckline, followed by a break below it, would confirm the head and shoulder setup.
In doing so, the move may shift REN's downside target to $0.30, measured after adding the distance between the head's high and the neckline to the breakout point. That is around 50% below the current trading price at $0.59.REN's head and shoulder setup comes as a part of a wider price correction that has seen the token shed nearly 70% of its value from a record high near $1.92 in Feb. 2021., suggesting that its correction toward $0.30 may end up causing a rebound toward $1.20.
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