For months, Quant (QNT) has been moving within a descending wedge formation since the middle of March, with its price oscillating between $60 and $70. Nevertheless, recent consolidation around $64.2 hints at a potential breakout on the horizon.
Both retail and institutional investor sentiment are trending towards optimism, prompting the question: Will QNT break out of its downtrend and push towards higher resistance levels?
Examining QNT’s Descending Wedge Pattern for Signs of Reversal
The descending wedge pattern is often viewed as a bullish reversal signal. In the current scenario where QNT is consolidating near $63.6, market observers are eagerly anticipating a potential breakout.
A successful surge above the critical resistance levels at approximately $70 could pave the way for a rally towards $120. However, the ability of Quant to attract sufficient buying pressure to break out of the wedge and progress further remains a crucial factor. Furthermore, the narrowing price range typically precedes substantial price movements.
Assessing Bollinger Bands and RSI for Momentum Clues
Delving into the technical indicators provides additional insights into the QNT situation. The Bollinger Bands are contracting, indicating reduced market volatility, while the Relative Strength Index (RSI) currently stands at 42.67, slightly above the oversold threshold.
Consequently, the RSI suggests there is still room for a potential upward push. Historically, the alignment of these two indicators often precedes breakout movements. However, traders need to exercise caution, as false breakouts are not uncommon in the absence of significant volume and momentum.
Evaluating Exchange Reserves for Clues on Selling Pressure
Recent on-chain data shows a marginal uptick in exchange reserves, climbing by 0.22% to reach 1.5487 million QNT in the past 24 hours. Typically, an increase in exchange reserves indicates mounting selling pressure as more tokens are being transferred to trading platforms.
Hence, this development could potentially restrict immediate upside potential if selling pressure intensifies. Additionally, overcoming this selling pressure is crucial for QNT to sustain its bullish trajectory.
Considering Liquidations for Market Stability and Risk Assessment
Analysis of liquidation data indicates minimal activity on the long side, with only $2.91K worth of long positions liquidated. Consequently, the market remains relatively stable with low leverage, reducing the likelihood of forced selling.
Nevertheless, any sharp price movements in QNT could trigger a rapid increase in liquidations, potentially amplifying market volatility.
Prospects for a QNT Breakout
Given the shifting sentiment towards optimism and the positive signals from technical indicators, Quant (QNT) appears primed for a potential upward movement.
However, the rising exchange reserves hint at potential selling pressure that could impede any significant price surge. If QNT manages to surpass resistance levels and maintain its momentum, it could target higher price levels, possibly testing $120.