- Degen crypto rallied beyond the psychological level of $0.02.
- The token was unable to defend this level during the retracement, and could fall another 14%.
Degen [DEGEN] was successful in its attempt to break the local resistance zone at $0.012, which had kept the bulls at bay since early October. The Degen crypto rally started at $0.0079 on the 8th of November.
In just over four days, DEGEN pumped by 172%, reaching a new local high of $0.0218 as Bitcoin [BTC] made new all-time highs.
The $0.02 level has some historical significance, but the bulls were unable to defend this level as support.
How deep will DEGEN retrace?
Source: DEGEN/USDT on TradingView
Degen crypto has been trending higher since the 1st of October, when the local resistance zone at $0.0055 was broken decisively.
The bulls encountered some pushback at the $0.0085 region, but eventually reclaimed the zone as a support.
The recent rally originated from this region, starting at $0.0079 and going to $0.0218. The RSI was still in overbought territory despite the pullback in recent hours.
The RSI being above 70 does not guarantee a retracement by itself.
Contextually, the Bitcoin dip from $87k has led to a wave of profit-taking, but DEGEN is likely to run much higher. This is because the OBV has climbed past the high it made in June, when the price was at $0.0153.
The market structure was firmly bullish, and the overhead targets next are at $0.0255 and $0.0316 based on the Fibonacci levels plotted for the recent rally.
To the south, the $0.015 area is expected to be retested as support.
Will DEGEN crypto move to $0.012?
Source: Coinglass
Is your portfolio green? Check out the DEGEN Profit Calculator
At press time, a drop to the liquidity pool at $0.0117 appeared unlikely. Yet, the cluster of liquidation levels there was potent, and the magnetic zone could pull DEGEN down to it.
Prices are attracted to liquidity, and a deeper dip for BTC would likely panic altcoin traders and force over-leveraged positions to liquidate, cascading prices lower.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
