The Graph (GRT) Approaches 363 Day Resistance Line

The Graph (GRT) has bounced considerably since its Jan. 24 lows, but has yet to reclaim a crucial horizontal resistance level. It has to do so in order for the trend to be considered bullish.

GRT has been falling since reaching an all-time high price of $2.88 on Feb. 12. Initially, it bounced at the $0.55 horizontal support area (green icon), and consolidated above it for 242 days.

However, the price broke down on Jan. 17, and proceeded to reach a low of $0.34 on Jan. 24. Measuring from the aforementioned all-time high price, this amounted to a decrease of 87.69%.

While GRT has bounced since, it is still trading below the $0.55 horizontal area, which is now expected to act as resistance. Furthermore, the area coincides with a long-term descending resistance line that has been in place for 363 days.

Short-term GRT movement

The six-hour chart shows that GRT has been trading inside an ascending parallel channel since Jan. 24. Such channels usually contain corrective movements, meaning that a breakdown would be the most likely scenario.

Most recently, the price was rejected by the resistance line on Feb. 7. This caused a downward movement that took GRT in the lower portion of this channel.

Wave count analysis

Cryptocurrency trader @Ewfib tweeted a chart of GRT, stating that the price is not yet done correcting.

There are two main possibilities for the wave count.

The first suggests that GRT has completed its correction, since there are five waves down measuring from the Nov. 9 high.

Also, the Jan. 24 bottom was made right at the 1.61 external Fib retracement level of wave four (red).

In addition to this, GRT has broken out from the 2-4 trendline.

The alternative count would suggest that GRT is currently in wave four of a five wave downward movement, after wave one extended. This is supported by the fact that the price is trading inside a short-term ascending parallel channel.

However, the invalidation level for this count is very close, being at $0.537 (black line), at the bottom of wave one.

Therefore, more information is required in order to determine the correct count. A reclaim of the $0.55 horizontal area would go a long way in suggesting that the correction is complete.