NEM (XEMUSD) Technical Analysis: Range Support Breakdown

NEM recently broke below the bottom of its range visible on the 4-hour time frame, signaling that further losses are underway. The range spans .085 to around .115 so the resulting selloff could be of the same height.

The moving averages still seem to be oscillating to reflect range-bound conditions, but the 100 SMA is staying below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, bearish momentum is likely to gain traction from here.

Stochastic is already indicating oversold conditions, though, so sellers might want to take a break and let buyers take over. Turning higher could reflect a return in bullish pressure and hint at a possible pullback to the broken range support. If this holds as resistance, price could resume its drop to the latest lows or lower.

RSI is also hovering around the oversold region and may be looking to turn higher. Stronger bullish pressure could take it back inside the range and even allow for a bounce back to the range resistance.

However, the sentiment in the cryptocurrency industry has been pretty grim as FUD has been in play on account of one selloff after another. It was seen to have started from the uncertainty surrounding the Bitcoin Cash hard fork then followed by the SEC crackdown on ICOs.

Many are also taking money off the table on weaker expectations for institutional inflows as funds are likely to be discouraged by the recent declines. This could take months before the selloff is unwound and market watchers are still struggling to think of a potential catalyst that could spur a bounce, more so sustain it.

Besides, risk aversion has also gripped financial markets so investors aren’t exactly hungry for more risk at this point.

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