In just two days, Mirror’s native token, MIR, has jumped 30% and formed a classic bullish reversal pattern. This gives people a more positive outlook.
A decentralized finance protocol built on top of the Terra blockchain, Mirror Protocol, was one of the biggest winners in the last 48 hours. This is because its native token, MIR, rose more than 30% to $1.48, its highest level since Jan. 22.
Has Mirror Protocol hit rock bottom?
The price of MIR went up even though there were no solid facts to back it up, which is a common sight in crypto assets.
As a result, its rise may have been purely technical, since it came after MIR had lost more than 90% of its value from its May 2021 high of $13. This made the token very oversold.
A market analyst called MIR’s rebound move a “no brainer,” noting that its long drop had left bulls with “tighter stop-loss,” which is a strategy that traders use to limit losses when the price falls below a certain price target. IncomeSharks, an independent market analyst, agreed.
However, IncomeSharks said that the Mirror Protocol token could still be at its low point, citing MIR’s on-balance volume as a possible reason (OBV).
In more detail, OBV is a running total of both positive and negative volume. This means that when the volume on up days is more than the volume on down days, the indicator rises. On the other hand, when there is more volume on down days, OBV goes down. A rising OBV shows that there is more volume pressure, which can lead to higher prices.
In a tweet on Wednesday, IncomeSharks said, “Large green volume candles are coming in near the bottom, the super trend 1/2 is turning bullish, and the OBV is breaking out and showing strength.”
A double bottom
More signs that the Mirror Protocol market is going to keep going up came from a bullish reversal pattern.
A technical formation called a “double bottom,” which happens at the end of a downtrend, appears to be happening with MIR. This means that the bears, who had been in charge of the market so far, have been losing momentum.
Among other things, the pattern looks like the letter “W” because it has two low points and then changes direction from down to up.
As a general rule, when the price breaks above its upper trendline, it tends to go even higher, by as much as the distance between its upper and lower levels. Thus, if you apply the same definition to MIR’s double bottom setup, it comes back with $1.73 as its bullish goal.
It also shows that MIR’s daily relative strength index (RSI), which is a momentum oscillator indicator, shows that it has been in a neutral zone with a reading of around 54. This means that the Mirror Protocol token has a lot of room to grow until its RSI reading gets to 70, which is a sell sign.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.