fxstreet.com
- Blur price is validating a cup-and-handle pattern that suggests the next rally could skyrocket the altcoin by 65%.
- In the last 48 hours following Binance-induced panic, investors sold nearly $9 million worth of BLUR for profits.
- There has been a sudden surge in the number of new addresses on the chain, which points towards a potential bullish momentum.
Blur price noted a rather spectacular trading day as the cryptocurrency noted a sharp increase. While a part of it was caused by the sudden profit booking, the larger narrative is now bullish, which could prove to be highly profit-bearing for BLUR holders.
The Binance effect
Over the past two days, the main driving factor for rises and crashes has been the Binance fiasco. With the exchange paying $4.3 billion to the US government as a settlement of the case to CEO Changpeng Zhao's (CZ) resignation and plea of guilty to charges of violating anti-money laundering laws, the effect has been catastrophic.
The initial reaction of the market was bearish following the announcement of CZ's exit, and consequently, altcoins dipped. But this did not last for long, as soon after the news of the settlement and the new CEO took over CZ's roles, recovery began, making the short-term market bullish at the moment.
Blur price to make the most of this bullishness
Blur price is visibly capitalizing on this bullishness as the altcoin shot up by more than 45% in the span of a day, trading at $0.509 at the time of writing. In doing so, BLUR also formed the cup-and-handle pattern that is bullish and hints at further increase.
The cup-and-handle pattern is being confirmed after the Blur price broke out of the $0.432 resistance on Wednesday. This means that the altcoin may see a sharp increase in the short- to medium-term.
The next target for BLUR based on this setup is $0.713, which would be achieved after Blur price shoots up by 64.80%. This would be possible as long as the $0.432 line is cemented as a support floor.
BLUR/USD 1-day chart
However, if Blur price falls through this line, not only will the bull be dismissed, BLUR would also be vulnerable to falling to $0.300 or further towards $0.156, erasing all recent gains and invalidating the bullish thesis.
The possibility of a decline is less likely
Looking at on-chain metrics, it is evident that investors did panic following the Binance fiasco and ended up selling more than $8.82 million worth of BLUR in a day. However, this also had a positive effect on the overall performance of the investors.
The network growth highlights that there has been a surge in demand. The spike on the metric suggests that the formation of new addresses has risen by 1,808%, which suggests that the project is gaining traction among crypto enthusiasts. This is considered a positive sign as new investors tend to conduct transactions on the chain, bolstering the price action of an asset.
Blur network growth
Secondly, the Market Value to Realized (MVRV) ratio shows some interesting development. Put simply, the MVRV ratio is an indicator that is used to assess the average profit/loss of investors who purchase an asset. The 30-day MVRV ratio measures the average profit/loss of investors who purchased an asset in the past month.
In the case of Blur, the 30-day MVRV sits at 45.41%, which indicates that investors who purchased BLUR in the past 30 days are sitting at 45% profit. These investors are likely to sell their holdings to book profits, which could trigger a sell-off. As seen in the chart, when MVRV hits 27% to 53%, BLUR has undergone major corrections. Hence, this area is termed a danger zone.
Blur MVRV ratio
However, selling would increase the liquidity of the asset, which can be picked up by the slew of new investors, as mentioned above. This would thus prove to be a bullish situation for Blur's price.