RSR TA Sunday — Edition 11
Happy Sunday Rangers! We’ve (un)officially made it, and are now using the Reserve Lodge Medium as our main publication format. Will be looking to continue adding posts here weekly over the next year, bringing you the best in fundamental and technical analysis related to the Reserve ecosystem.
First, some housekeeping — I’ll add prior links to past TA Sundays to the bottom of each post, so you can easily look back in time to see how performance looks, where we may have been a little off-base, and where we’ve been spot-on.
A friendly reminder that Technical Analysis is a game of probabilities, so while we won’t always be 100% correct, this should give you a sense of where things are heading. Fundamental Analysis can help validate what we see in the charts, so this will also be an important piece of each article.
User Adoption — It’s Happening!
As spotted by the Reserve Lodge, the Reserve App has been quickly climbing the ranks as one of the most popular finance apps in Venezuela. I expect this trend to continue in the coming weeks as the Reserve App opens to those outside the waiting list.
The Twitter page for Hola Reserve, the Reserve Protocol’s social channel for South America, has also been growing substantially over the last two weeks, as shown below, growing from 14.9K at the start of March, and topping out at 18.7K followers as of this writing.
Remember, these are the statistics that are coming from only the existing waiting list opening up — as the app opens broadly starting March 16 and continues over the coming weeks we can expect to see continued growth with new users joining, sharing their experiences with others, and creating the true beginnings of the network effects that we’ve discussed in previous posts.
There is far too much to unpack here, but definitely have a look at the latest Reserve AMA from March 9th for more exciting information on the plans for the rest of March, April, and onwards.
Technical Analysis — week of March 14th
Weekly Timeframe — USDT Pair
On the weekly timeframe, the headline is a weekly close at just above $0.070, which was once again above the previous all-time high close of $0.067. Although there was significant price action this past week, breaking new all time highs once again to nearly $0.083, the last few days of the week saw healthy retracement and consolidation around the $0.070 mark.
Daily Timeframe — USDT Pair
Although a bit difficult to see below, we can track daily peak-to-trough from the Huobi IEO as moving to shorter and shorter cycles. It is worth noting that this projection includes our end-of-year targets of $2.50 in a bullish case, and $0.35 in a bearish scenario, with a mid-point base-case of $1.45. Price targets from Delphi Digital’s report are shown in gray (bull) and orange (base).
Interestingly, these seem to be consolidating in an upward channel on the daily, as shown in the second chart below. We can see not only consolidation forming from the last few days, but also since the beginning of this year when the app began testing in closed beta.
If we look back at trough-to-peak price action since September 2020, we can track three moves of 208%, 187%, and 130%, respectively. The latest close puts us in the middle of a trough-to-peak projection of 178%, taking place over the course of 34 days. This would not only bring us to the upper end of the channel that has formed since January, but bring us to the lower end of a Fibonacci band based on price resistance from the previously marked cycle at roughly $0.047. This marks an aggressive price target for RSR by the end of March at $0.12.
In a more bearish though unlikely short-term scenario, it is possible that the MACD crosses and we experience some downside price action as far as the $0.055 to $0.060 range (bottom end of the channel) during which time our $0.12 target would be moved out to the end of April or beginning of May. I do see the shorter term consolidation from the past week as positive however, so would not hesitate to open longs around the $0.070 level, and would be an aggressive buyer at the $0.055 level.
Daily Timeframe — BTC Pair
As mentioned last week: A solid break and daily close over 160 would confirm breakout against BTC, however for now I do expect continued ranging between 130 and 160 as bitcoin likely regains its strength this week.
You can see below that we did breakout briefly above 130 and test the 160 level on the daily, however we are continuing to consolidate in a healthy range. I expect this to continue through the next month as both bitcoin and RSR exhibit strength and greater adoption. I am still looking for a solid break and daily or even weekly close over the 160 level to confirm breakout vs. bitcoin in the longer-term. We will want to watch this one closely, as a consolidation channel is forming which will need to give way in the May or June timeframe.
Given the price action of bitcoin, as well as the MACD crossover you can see below, I do expect sideways action in RSR/BTC in the short-term. Another test of the 100 sat level is not out of the question and would be a buying opportunity for those looking to maximize their allocation vs. bitcoin.
DISCLAIMER: “TA Sunday” is for entertainment and informational purposes only and is not meant to be construed as financial advice of any kind. All investments carry risks.
“TA Sunday” is not endorsed or supported by the Reserve Team, or any of its affiliates.
