- Loom Network price has surged by almost 1,000% from its September lows.
- The token has formed an inverted hammer pattern on the 4H chart.
- It is now entering the markdown phase of the Wyckoff mode.
Loom Network price has been in a strong bullish trend in the past few weeks, making it the best-performing cryptocurrency in the market. It surged to a high of $0.5032 on Sunday, ~971% above the lowest level in September. This surge has pushed its total market cap to over $436 million.
Loom Network has risen sharply for three main reasons. First, the rally was triggered by the listing by Gate.io, a leading crypto exchange that handles over millions of crypto transactions every day. Most cryptocurrencies do well when key exchanges list them.
Second, as I wrote here last week, Loom Network price surged after its leverage tokens were listed by Binance and LBANK. Binance’s listing was notable since the company is the biggest player in the crypto industry in the world.
Third, Loom Network surged as volume in the ecosystem surged. Data by CoinMarketCap shows that the volume of Loom traded in the past 24 hours rose to over $1 billion, with most of them being in Upbit followed by Binance. This means that this pump could be caused by South Korean traders.
Finally, the rally has also happened because of FOMO. In most cases, cryptocurrencies rally because of a concept known as fear of missing out. Many traders have likely entered the trade with the goal of benefiting from its gains.
Loom Network price outlook
My last week’s Loom prediction did not work out as predicted. At the time, I predicted that the price would crash as it entered the distribution phase of the Wyckoff model. I still believe that the uptrend is nearing its end since there is no major fundamental cause for the rally.
My expectation is that Loom is still in the distribution phase and could enter the markdown stage. Markdown is characterized by higher supply compared to demand. We have seen these surges and breakdowns before.
For example, Shiba Inu, Internet Computer, and Cardano went vertical in 2021. Today, they have all crashed by over 90% from their peak. Similarly, in the stock market, shares of companies like GameStop, Bed Bath & Beyond, and ContextLogic surged during the meme stock mania period. They have all plunged, with BBBY going bankrupt.
Therefore, there is a likelihood that Loom Network price will recoil as well. Besides, it has formed an inverted hammer pattern. If this happens, the markdown phase will see it crash to $0.20.
