The DeFi index (DEFIPERP) has been rising throughout December and may soon break out of the downside resistance line.
On December 4, DEFIPERP reached a low of $ 1,927, bounced considerably and created a very long bottom core (green icon). This is considered a sign of buying pressure. Bounce also helped validate the $ 2,000 area as support. This is both a horizontal support area and a 0.618 Fibonacci retracement support level.
The index has risen since then, reaching a high of $ 2,837 on December 27th. After a short-term decline, it started an ongoing ascending movement.
Breakout attempt
Cryptocurrency trader @TradingTank He tweeted the DeFi index chart and said it is expected to increase.
DEFIPERP is currently trying to break away from the downward resistance line that has been in place since November 10. This confirms that the ongoing fix is complete.
Technical indicators support the possibility of breakouts.
MACDs created by short-term and long-term moving averages (MAs) are on the rise and are almost positive.
The last time such a move occurred in MACD was in August 2021 (green circle), which preceded the current uptrend to the annual high.
In addition to this, the RSI is rising, above 50. This is a sign of bullish momentum and supports reading from the MACD.
In the event of a breakout, the nearest resistance area will be $ 3,050.
However, the 2-hour chart shows signs of slight weakness.
First, DEFIPERP is traded in ascending parallel channels, which is considered a modification pattern. This means that failure from the channel is the most likely scenario.
Second, there is a fairly bearish divergence that occurred in the RSI. This often precedes the drop.
Therefore, a short-term decline can occur before the final breakout. If one happens, the channel’s support line and the $ 2,580 area are expected to start bouncing.
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