Monday July 26, was good for crypto bulls. Most cryptocurrencies gained on news that Amazon may start accepting Bitcoin payments by the end of this year.

However, the Theta token was an exception, as it traded within narrow ranges. At the time of writing, THETA/USD was down 0.44%, while major cryptocurrencies, such as Bitcoin, surged as much as 10%.

But there is a reason for this!

THETA/USD has enjoyed a stellar week compared to other cryptocurrencies. The cryptocurrency rose from the low of about 3.5 reached on July 20, to a high of 6.7 on July 26.

The previous outlook for the digital token suggested an even lower target price of 5.874, which means Theta has surpassed expectations. It is therefore acceptable that Theta has lost its previous bullish momentum and could now be seeking new support before another potential surge.

See the Charts Below:

THETA/USD – A Technical Outlook

Theta 4-HR Chart Analysis

Theta Daily Chart Analysis

Observed on a 4-hour chart, THETA/USD retreated from a minor resistance area around 6.668, following its bullish run of the previous week. The price is contained on the minor resistance and above the major support at 5.849.

On the daily chart, things get a little bit twisted as well. Theta is contained on a descending trendline, which forms a descending triangle via the support area around 3.5. A bearish pin bar can also be seen forming at the point where Theta touches the descending trendline.

Overview

Currently, THETA/USD has no confirmed trade setup. However, the following should guide trade decisions in the next few days:

• • Theta’s bullish move over the past week should not be discounted as merely short-term. Since prices bounced off from major make-or-break support at around 3.5, and have been rallying strongly, I interpret it as a potential long-lasting bullish momentum.
  • Monday’s bullish turn on crypto markets after the Amazon news should be factored into further predictions of THETA/USD. Despite the current loss of momentum on the digital token, cryptocurrencies demonstrate high volatility at the merest hint of news in the industry. Theta is likely to follow other cryptocurrencies in rising further.

Trade Idea

I expect THETA/USD to move lower from the current minor resistance at 6.668 on the 4-hour chart. and a bearish pin bar to form on the descending trendline on the daily chart.

Nonetheless, I expect prices to bounce quickly from the major support at 5.842, before rallying higher. As a cautious trader, I will wait for prices to break above the descending trendline on the daily chart before entering a buy trade.

For the buy trade, I will target 7.236 and 8.411, as they have acted as market event areas before. Happy trading!