The price of Nervos Network’s CKB has been going up for the past 10 days and has already grown by more than 150% within this period.
One of the major triggers for the bullish trend is a breakout from a descending triangle pattern which happened 6 days ago. Following the breakout, the price had no retest on the daily time frame and it rose by around 120%.
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The price started moving strongly earlier today but has seen a retracement of around 10%. The question remains if the move is coming to an end already.
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Technical Analysis Suggests a Possible Retracement
A look at technical analysis shows RSI is at 81, which is already in an over-bought position, and we could be seeing a retracement for a longer period before the move continues upward.
An RSI reading of above 70 is considered an overbought metric, and at that point, traders typically start to look for signs of retracement.
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Show more +The 200-day simple moving average is currently acting as support for the price, and it could hold the price from further dips in case of a long retracement.
Thus, looking at these two technical indicators, we could say that the price could go bearish for a while as it retraces the move. We expect the support at around the 200-day simple moving average to hold. However, a break below this level could see the price retest the broken trendline as new support.
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Fundamentals Show Long-Term Strength
Looking at the fundamentals, CKB could be bullish in the long term because of the positive metrics around it. Dondara, a crypto analyst on X, talked about CKB’s flexible UTXO model and interoperability, which is highly attractive when combined with innovations like RGB++.
According to the analyst, this feature makes CKB attractive to developers since they are always in search of platforms that are resilient and allow the creative management of assets. This could also make the Nervos Network’s developer activities grow and thus sustain the surge in the value of its CKB native token in the long term.
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