Kyber Network’s native token KNC appreciated enormously on Friday, with its price hitting $2 for the first time since May 2018.
The 41nd-largest cryptocurrency market cap surged 20 percent in the last 24 hours. The gains appeared without any real fundamental catalysts, pointing to more considerable price speculation among daytraders who rely on chart signals.
KNC’s price appreciation also followed a massive upside rally. The token earlier rose by more than 1,000 percent for the year against the US dollar that benefited investors with holding sentiment. Meanwhile, its upward trend met multiple downside corrections, illustrating daytraders securing their profits.
Kyber Network chart on TradingView.com showing KNCUSD trading higher in 2020.
Placing the KNCUSD price trend on a weekly chart showed it trending inside a Rising Wedge. It is a technical pattern that signals a reversal after a long period of upside trends. That said, KNCUSD might extend its bullish move higher as long as it stays within the Wedge’s range.
That begins with the current retest of the Wedge’s upper trendline – a resistance level. Traders could use it to increase their short exposure in the KNC markets. That could lead to a pullback move towards the lower trendline of the Wedge, which has been acting as a support level since March 2020.
KNC at $2.78
The chart above also illustrates the point at which the Rising Wedge may exhaust. That is the pattern’s apex–where the Wedge’s trendlines finally converge. After that, KNC should ideally undergo a breakdown towards $0.91 (the length of the fall is typically the same as the maximum height of the Wedge).
Nevertheless, what the Falling Wedge confirms is an uptrend before a sharp pullback. Its apex coincides with $2.78, a–greened–level with historical significance in the KNC market. In December 2017 and April 2018, for instance, it acted as resistance to KNC’s bullish attempts. Traders might expect the price to repeat the fractal all over again.
One analyst noted that KNC’s “bottom/accumulation pattern is now expanding with bullish market structure (higher highs, higher lows),” adding that the token now expects further expansion.
— CJ (@IrnCrypt) August 13, 2020
An Optimistic Outlook
The optimistic technical outlook is receiving further assistance from KNC’s fundamental outlook.
The token operates from the core of this year’s fastest emerging decentralized exchange, the Kyber Network. The Ethereum-based protocol aggregates liquidity and facilitates swaps for ERC-20 standard tokens. It does so by approaching reserve managers that maintain liquidity in the trading pairs and update bid and ask spreads.
In return, Kyber compensates the reserve managers by paying KNC. The receiving party also utilizes the token to pay a 0.25% fee for every transaction – a strategy that protects the exchange from wash trading. Reserve pools also use KNC as a stake to provide liquidity to the Kyber Network.
A study conducted by the data research firm Messari showed an increasing demand for decentralized exchanges like the Kyber Network. The report mentioned that DEX platforms have mousetrapped “an increasingly larger share of total trading volume in crypto, particularly over the last few months.”
That makes the Kyber Network a convincingly bullish project before traders and investors alike. It also amounts to a greater KNC adoption in the coming sessions.