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Analyzing the Future of Klaytn (KLAY) Following a Three-Year Low

Klaytn (KLAY) has been on a downward trajectory since reaching its yearly peak on February 22

by Alexander
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Klaytn (KLAY) has been on a downward trajectory since reaching its yearly peak on February 22, with no evident signs of a bullish reversal. This analysis delves into the recent price decline and offers insights into what might lie ahead for KLAY.

Klaytn Price Hits Three-Year Low

Having maintained a trading range above the $0.145 horizontal support since September 2022, KLAY encountered a breakdown in August 2023. On September 20, the price plummeted to $0.111, marking its lowest point since May 2020. Despite this decline, it remains higher than its all-time low of $0.057.

KLAY/USDT Weekly Chart. Source: TradingView

KLAY/USDT Weekly Chart. Source: TradingView

The price movement leading up to the breakdown suggests a bearish trend, supported by the completion of an A-B-C wave structure with an upward orientation. This pattern, rooted in Elliott Wave theory, points to the prevailing bearish trend.

Potential Support and Resistance Levels

Should the downward trend persist, the nearest support level to watch is at $0.051, representing a 55% decrease from the current price. This level aligns with the 1.27 external Fibonacci retracement and could establish a new all-time low.

Conversely, a sudden surge in momentum could drive the price up by 30%, aiming to retest the $0.145 resistance area, which is now likely to act as a formidable barrier.

Short-Term Reversal Possibility

On the daily chart, KLAY’s bearish trend persists, but there’s optimism that a price bottom may be nearing. The daily timeframe reveals that KLAY is in the fifth and final wave of its downward movement. Upon completing this wave, a substantial upward move is anticipated.

Projecting a 0.618 length of wave one to the top of wave four gives a target price of $0.074, representing a potential 35% increase from the current level. However, if KLAY doesn’t find support there, it may continue its descent to the previously mentioned $0.051 support zone.

 

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