- Grass cryptocurrency surpassed $3 with high trading volume.
- It may take a day or two for further gains to unfold and a decline in prices is expected.
The Grass (GRASS) cryptocurrency has hit new highs and continues its price discovery phase. Daily trading volume increased 21.6% in the last 24 hours to an impressive $601 million.
Technical analysis suggests that the token could trend downward and fall below $3. Since the market structure is bearish, these dips are likely to be buying opportunities. A retracement below $2.5 could be the first sign of a long-term correction.
Bearish divergence hints at overextended markets
Source: GRASS/USDT on TradingView
Trading volume has been increasing since November 5th. OBV has also been steadily rising, showing that buying pressure has been high and the rise in GRASS has been driven by actual demand.
RSI on the 4-hour chart has been above the neutral 50 level for the past three days. Momentum has been strongly bullish but has formed a bearish divergence over the past two days.
RSI made lower highs and price made higher highs. These differences do not guarantee a trend reversal. Instead, it is a signal that the market is more likely to see some downside.
The previous resistance zone of $2.7-$2.85 is expected to act as support in the coming days in case a decline occurs.
Potential 14% drop in Grass cryptocurrency
Source: Coinglass
Another indication that the $2.7 area is a demand zone came from the short-term liquidation heatmap. The previous high of $3.03 saw a significant amount of liquidity amassed just above it in the last 24 hours.
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As a result, GRASS price magnetized towards it and swept this area. There is a possibility that the token will continue to gain more profits.
However, a drop to the nearest liquidity pool at $2.7 is also possible due to the momentum divergence on the H4 chart.
Disclaimer: The information presented does not constitute financial, investment, trading, or any other type of advice and is solely the opinion of the author.