Here’s why XEC’s 40% hike comes with a clear warning for traders!

eCash [$XEC] has been on the bullish side of the market lately, with the altcoin flashing signs of buy-side dominance after a hike in bullish interest.

This was evidenced by its gains of 14% in the last 24 hours. This, on the back of the altcoin’s cumulative gains of over 40% in the last 30 days. Hence, the really important question right now is this — Can eCash can sustain this run?

eCash’s rally structure hides resistance wall ahead

The structure of $XEC revealed a clear bullish pattern on the broader scale, defined by a horizontal resistance line and an ascending support level on the chart.

This formation would typically convey the sense of a bull market. However, a closer look at the pattern at press time revealed that investors could soon face major pressure.

Source: TradingView

In fact, data showed $XEC surging towards a major resistance zone, one capable of weighing heavily on the rally and impeding any further growth. In the short term, the price could still push forward before slipping into a downtrend—a temporary formation—as the momentum driving the rally fades.

As it stands, the momentum still carries enough bullish strength to hold the price at a higher ground, with volume up by 309% to $31.4 million.

$XEC momentum and capital flows flash early warnings

The aforementioned pressure may be becoming persistent for $XEC though, with the Moving Average Convergence Divergence (MACD) pointing to to growing weakness.The MACD tracks whether buying or selling power dominates the market through its MACD line (blue), its signal line, and the histogram.

Both lines produced a bearish crossover a few days ago, with the same now trending lower towards the negative zone. A drop into that zone is usually indicative of a fresh hike in sell pressure.

Source: TradingView

The Money Flow Index (MFI), which tracks capital moving into and out of an asset, also suggested that investors may now be pulling back. This alluded to capital flowing into $XEC declining sharply.

A bullish rally needs demand to sustain itself, demand which usually arrives in the form of fresh money. The same is absent this time around.

With both momentum and capital on the downside, the odds of buyers becoming exhausted may be high.

Bullish $XEC sentiment builds even as risk grows

Finally, sentiment around $XEC has stayed bullish so far. This is the typical reading one would expect in a bull market.

Interest measured through social shares has jumped significantly over the past few days. Community sentiment, which tracks how investors lean, showed a 4.18/10 reading. This suggested that bullish conviction may still be building.

Posts related to $XEC have surged too, with roughly 904 appearing across the market. As it stands, the altcoin may be drawing more retail traders into the market while also placing them at risk.

Final Summary

• $XEC has gained by 40% over the last 30 days, with a horizontal resistance line and ascending support forming a clear bullish structure on the broader chart.
• Declining capital inflows hinted at fading demand, raising the odds that buyers could grow exhausted.

Source