Golem Stuck In Short Term 2 Week Range Bound Condition

After a promising start to month of July, Golem has continued it’s recent bearish trajectory falling a significant 12% over the past 24 hours alone. This comes after a week of downward pressure pushing price down by a total of 16.87%, at the time of writing, over the past 7 trading days.

Golem was created by Julian Zawistowski and was intended to become a decentralised supercomputer. People with spare processing power from their systems can loan this resource to the Golem super network and receive Golem tokens for remuneration. In turn, users that need rendering done for specific projects can loan this spare resource out at a price.

The use case for golem is currently limited to rendering processes within the Blender application. However, the team are aware of the limitations this poses for growth and are focused on releasing new use cases for the super computer to be used. The team is also currently hiring a new community manager based in Warsaw to help strengthen relations between the team and the community.

Golem is currently ranked 46th in terms of overall market cap across the entire industry with a total market cap value of $253 million. The ERC-20 token has experienced a rough previous two months dropping a total of 33.66% over the last 30 trading days alone.

Let us continue to analyse Golems price action over the the trading year.

Price Analysis

GNT/USD – LONG TERM – DAILY CHART

GNT price chart 10 july 2018

Analysing the market from the long term perspective above, we can see that price action had experienced an incredible bullish run toward the end of 2017. The market started from a low of $0.15 on the 12th of November 2017 and extended all the way up to a high of $1.38 experienced on the 2nd of January 2018. This was an extraordinary price increase of 730% from low to high.

Naturally, after placing such a strong bullish run, the market went on to depreciate throughout the rest of the year. We can see that price action had found substantial support at the .886 Fibonacci Retracement priced at $0.29 during February 2018. This is a Fibonacci Retracement taken from the entire bullish run seen from November 2017 to January 2018.

During March, the market dipped below the .886 Fibonacci Retracement until it found support at the 1.272 Fibonacci Extension priced at $0.22. This is a Fibonacci Extension taken from the initial bearish leg seen during January 2018 after placing the high. The market found significant support at this level as it reversed and began another price rally.

We can see that during April, price action rallied at a significant rate on April 14th. This is because Golem launched their product on Ethereum’s mainnet, effectively activating the supercomputer for usage in a live environment.

Price action is currently trading at the $0.30 and has currently found support, once again, at the .886 Fibonacci Retracement priced at $0.29. If the bearish pressure continues then the nearest level of support from a long term perspective comes in at $0.22 which is the 1.272 Fibonacci Extension. Support beyond this level is located at November’s low at $0.18 followed by the 1.414 Fibonacci Extension priced at $0.09.

Let us analyse the market over the more recent period a little closer to highlight some more significant support and resistance levels.

GNT/USD – SHORT TERM – DAILY CHART

GNT price chart 10 july 2018 2

Analysing the market from a short term perspective, we can see that price action had experienced  another bullish run, rising from a low $0.17 on the 1st of April and rising to a high of $1.03 on the 3rd of May (ignoring the spike high on April 14th caused by GNT mainnet launch).

After placing this high price action fell, originally finding support at the 100 day moving average priced around $0.45 during May. This was just below the short term .618 Fibonacci Retracement (marked in red), priced at $0.27. The Fibonacci Retracement is taken from the short term bullish run described above.

During June, price action continued to fall through the .618 Fibonacci Retracement, initially finding support at the .786 Fibonacci Retracement priced at $0.36, before falling further until find support at the short term .886 Fibonacci Retracement priced at $0.27.

Over the past two weeks, the market has remained within a range bound between the .786 Fibonacci Retracement and the .886 Fibonacci Retracement. A break below the .886 Fibonacci Retracement priced at $0.27 would indicate that the bearish trend will continue. In this scenario, the nearest level of support is found at the 1.272 Fibonacci Extension (mentioned above) followed by the short term 1.414 Fibonacci Extension priced at $0.18.

Alternatively, if the market can find support around the short term .886 Fibonacci Retracement and revere to power above the .786 Fibonacci Retracement then the market will find some near term resistance at the .618 Fibonacci Retracement priced at $0.50. Resistance following this level can be found at the .50 Fibonacci Retracement priced at $0.60.

The technical indicators are currently providing favour that leans toward the bears at this moment in time. The RSI recently falling through the 50 handle indicates the increased bearish sentiment within the market. If we want to see the bulls entering the market we would like to see the RSI make it way and eventually break above the 50 handle.

Similarly, the 7 day EMA blue line) has recently turned away from the 21 day EMA (purple line). These moving averages were poised to cross above one another to signal a bullish crossover, however, the recent drop in price has caused the 7 day EMA to turn away from the 21 day EMA and head lower. For an indication that the bearish sentiment is beginning to fade within the market we will expect the 7 day EMA to head back toward the 21 day EMA and eventually cross above it. This would signal a bullish crossover indicating that the bulls are beginning to regain corntrol.

CONCLUSION

Although the market has continued taken a recent drop over the past week again, it is important to remain confident in the project. The market is fast approaching strong support and the Golem team continue to release regular updates to keep the community informed.

We will be closely watching the market  to see which direction of the range it decides to break. We are also looking forward to the updated roadmap expected to be released in the upcoming weeks.

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