Is the LOOM Price Rally Running Out of Steam?

Since early September, the Loom coin price has outperformed its peers in the crypto market. From the September 2nd low of $0.0374, the coin price showed a remarkable rally to the $0.2948 high, registering a total gain of 682.6%. However, the price started witnessing supply pressure around the $3 psychological level raising the question of exhausted bullish momentum.

Also Read: Odds Of Spot Bitcoin ETF Approval By US SEC Rises Above 90%: Bloomberg

Exhausted Bullish Hints Minor Correction Ahead

• The LOOM coin price is facing intense supply pressure at the $3 mark.
• The potential correction could plunge the price 27.5% before hitting a significant support at $2
• The intraday trading volume in LOOMer is $276 Million, indicating a 58% loss.

Source- Tradingview

Defying the broader market uncertainty, the Loom Network coin price has shown a parabolic growth in the daily timeframe chart. While there isn’t a clear catalyst for this recent rally, the notable trading activities on the South Korean exchange platform Upbit have raised attention. 

By the press time, the LOOM price trades at $0.27, with a modest intraday gain of $0.5. However, at the $0.3 barrier, the coin price formed two long-wick rejection candles, reflecting indecisiveness among traders. These candles of uncertainty forming after a huge rally hint at the exhaustion of bullish momentum and an early sign of an upcoming correction. 

Anyhow, it is common for an asset to show some retracement after a significant recovery to recuperate the exhausted bullish momentum. This is a healthy activity that may also offer buyers to reaccumulate this crypto at a discounted price.

Key Levels to Watch

Amid the anticipated retracement, the Fibonacci Retracement Tool can assist traders in identifying crucial support levels that can resume the recovery trend. The first noteworthy support stands at the $0.33 mark, coinciding with the 23.6% Fibonacci level, followed by the $0.2 psychological support, which aligns with the 38.2% Fibonacci retracement. Additionally, the $0.165 level, corresponding to a 50% retracement, could serve as a crucial support level. A breach below this point might suggest a weakening of buyer momentum, thereby flagging increased risk for the coin’s bullish outlook.

• Exponential Moving Average: the 20-and-50-day EMA could act as strong support in the retracement phase.
• Relative Strength Index: The daily RSI slope at the overbought regain of 86% indicates a higher potential for correction.