XDC has surged recently but has run into resistance around $0.10 and failed to break above a key downtrend.
Xinfin Digital Contract, the native token for the Xinfin blockchain network, has seen its price per dollar surge over the past two days from under $0.070 per token to now in the $0.090s. That’s amounts to a two-day rally of more than 30% for XDC/USD.
The latest surge has pushed XDC’s market capitilisation back above the $1.0B mark and currently sits around $1.12B. That’s up from just above $800M as recently as Tuesday.
XDC/USD appeared to find support at the mid-July lows around $0.067 earlier in the week. Note that the 14-day Relative Strength Index also fell into oversold territory (i.e. under 30) for the first time in many months, which some speculators may have taken as a buy signal.
But the cryptocurrency appears to have run into resistance at its 200-day moving average, which sits close to the psychologically important $0.100 level. That means the cryptocurrency is still trading more than 50% lower versus its mid-August highs at close to $0.20.
Long-term Downtrend Remains Intact
XDC/USD’s latest surge has not seemingly been enough to trigger a breakout of a long-term descending trend channel that has been capping the price action since the August record high. Even, if the cryptocurrency is able to get above the $0.10 level, it faces stiff resistance from a downtrend linking the late-September, early-October and late-November highs, which will come into play in the mid-$0.10-$0.11 region.
Failure to break above this level (and the 200DMA and $0.10 mark) would be a bearish sign and, from a technical perspective, XDC’s next move would likely be back lower again towards a retest of recent lows in the $0.060s.
Conversely, if XDC can muster a bullish break above this downtrend, that would bring into focus the November highs close to $0.12 and perhaps a run towards the October highs at $0.15 and even a test of the record highs just under $0.20. But that is a big if.
XDC’s long-term downtrend still in play. Source: FXEmpire
Exponential Growth Trend To Continue?
The long-term bulls and HODLers will remain confident that XDC’s long-term momentum remains positive. Looking at XDC/USD on the logarithmic chart since the start of 2020, a bullish trend clearly remains intact.
XDC’s exponential trend still intact. Source: TradingView
XDC/USD is up an incredible nearly 17,000% from its early 2020 lows around $0.0005. Extrapolating the current trend forward to the end of 2022, XDC could be on course to breach $1.0 within the next 12 months, which would amount to gains of roughly 1000% from current levels.
But this goes both ways. If the current exponential trend is broken, it would’t be crazy to expect XDC/USD to fall all that way back to test support in the $0.01 area.
Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018. Joel specialises in the coverage of FX, equity, bond, commodity and crypto markets from both a fundamental and technical perspective.