KAVA saw its price bouncing back from $1.6 on 13 May. The resulted leg up triggered an 82% rally to hit the oversold hurdle at the $2.9 mark.
Nevertheless, the recovery surge resonates with an inverted flag formation’s climbing wedge channel, showing the possibilities of another plunge towards $1.6 once more.
Vital Points
- KAVA has its price rising inside an inverted flag setup.
- The 50-day and 100-day Exponential Moving Average exhibit a bearish cross.
- Kava’s trading volume is $233 million, reflecting a 217.9% increase.
KAVA had its price confined inside a consolidation range, extending between $5.6 and $2.93 from mid-November last year. Meanwhile, reversals from the $5.6 range resistance matched the May bloodbath, accelerating the magnifying selling momentum.
That saw KAVA breaching the $2.93 bottom support on 9 May, stretching the ongoing retracement phase. Therefore, the post-retest plunge halved the KAVA price, dumping it towards the $1.41 lows.
Unlike most large-cap cryptos, KAVA saw a sharp recovery, gaining 112% in three weeks. The alt retested overhead resistance on 31 May, and the long wick confirms substantial supply momentum.
Furthermore, the relief surge highlights an inverted flag setup, which might support the prevailing downward move. Therefore, the anticipated fall would reach the initial target of $1.41 before extending to $1.2.
On the other side, the broad market struggles to keep upside moves that originated over the weekend. However, bears seem committed to dragging the market down again. Bitcoin could not overcome the $32K mark, changing hands near $31,667 at this publication.
The bulls’ failure to maintain the current leg up would translate to new downside actions. Such weakness supports KAVA’s downside narrative.
KAVA Technical Indicators
Lateral move among the trend-definer DMAs – 100 & 200 – supports KAVA’s range-bound rally. Furthermore, the latest pessimistic cross between the 50MA and 100MA backs the flag setup fallout.
Meanwhile, the steady uptick by the Moving Average Convergence Divergence plus signal line slope bolsters the prevailing relief rally. A possible bearish cross between the slopes would enhance increased selling.
Resistance levels – $2.9, then $3.6
Support levels – $2.2, then $1.6