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1INCH breakout of bullish pattern, towards next resistance at $3.70

1INCH has broken out above the short-term pattern and is trying to find support to resume its upward movement.

Descending parallel channel

1INCH has been falling since October 27, when it hit a high of $7.73. The drop begins with a long upper wick (red symbol), which is considered a sign of selling pressure.

The price has so far hit a low of $1.18 on Feb. 24. The low served to confirm the support line of the third long-term descending parallel channel (green icons) tree). Thus, all movement since May 2021 has been contained inside this channel.

The first key resistance area is at $3.70. This is the 0.382 Fib retracement resistance and is very close to the midline of the channel.

Daily 1INCH/USDT chart
Daily 1INCH/USDT chart/ Source: TradingView

How long will 1INCH increase?

Trader @CryptoNTez tweeted a 1INCH chart, saying that the token could rally to $2.50.

Token has broken out above a short-term descending wedge, showing that it has started an uptrend. The breakout was initiated by a bullish divergence in both the RSI and the MACD (green line).

While it hit a high of $2.10 on April 2, it was rejected by the 0.5 Fib retracement resistance and has been declining since.

However, as the MACD and RSI are still increasing, the daily trend is likely to remain bullish.

Daily 1INCH/USDT chart
Daily 1INCH/USDT chart/ Source: TradingView

Counting waves

Since the all-time high on May 8, it looks like 1INCH has completed an A-B-C flat correction structure. The fact that the A:C wave has an exact 1:1 ratio and that the movement is contained inside a descending parallel channel, both support this possibility.

If true, token is expected to see a very strong rise, potentially reaching new highs. This is also consistent with technical indicators from the daily timeframe.

Daily 1INCH/USDT chart
Daily 1INCH/USDT chart/ Source: TradingView

The short-term movement shows that token is in the process of completing a pullback containing wave 4. This is an event that occurs in which price falls back down the channel to complete wave four. Then the fifth and final wave will begin.

The $1.66 – $1.76 zone is the most suitable area for the price to make a bottom. This is the 0.382-0.5 Fib retracement support of wave three. Also, the first level coincides with the midline of the previous parallel channel, while the latter coincides with its resistance line.

Therefore, the most likely scenario is 1INCH bouncing up at one of these levels and continuing its upward movement.

INCH/USDT 6-hour chart
1INCH/USDT 6-hour chart/ Source: TradingView