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SLP Struggles To Find Footing After Axie Infinity Subjected To Income Tax

Small Love Potion (SLP) has been falling since completing a double top pattern on July 13. 

It has been decreasing alongside a descending resistance line since, and has reached a low of $0.138 so far.

Ongoing descent

SLP has been moving downwards since completing a double top pattern on July 16 (red icons). The decrease has taken the shape of a descending wedge.

Most recently, SLP was rejected on Aug. 24 and created a bearish candlestick. The rejection came on the heels of the announcement from the Philippines undersecretary that profits from games such as Axie Infinity are subject to income tax.

Despite the fact that the descending wedge is considered a bullish pattern, technical indicators are bearish. The MACD is negative, the RSI is below 50 and the Super trend is bearish.

Nevertheless, SLP is approaching the $0.115 horizontal support area. Considering that it coincides with the support line of the wedge, a breakout from it would be likely, even if it did not lead to a sustained bullish trend.

Chart By TradingView

Future SLP movement

Cryptocurrency trader @Thebull_crypto outlined an SLP chart, stating that the breakout could take it to $0.25.

Source: Twitter

However, the token has broken down since the tweet. Despite this, it is approaching the long-term support area outlined in the previous section.

In addition to this, both the RSI and MACD have generated bullish divergences, even if they are still unconfirmed.

If a breakout occurs, the next closest resistance would be at $0.22. However, due to the readings from the daily time-frame, this would not mean that the trend has turned bullish.

Chart By TradingView

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

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