Over the course of the last week, the blockchain market was flooded with positive news coming from China. After the president’s positive statement on blockchain adoption, top central bank officials echoed the sentiment. What followed shortly after was Chinese-based cryptocurrencies rapidly increasing in price.
Amidst all of this fever about China’s love for the blockchain, what is getting quickly forgotten is its neighbor, South Korea. The country has a very large blockchain community and has made some progress in blockchain adoption since several major convenience stores accept a form of cryptocurrency as payment.
Arguably the biggest South Korea based coin is ICON (ICX), which allows blockchains to interact with each other through smart contracts. Positive news from South Korea could cause it to increase in price — even if the technical outlook seems bearish.
Crypto trader @cryptoshadowoff stated that, if a Korean narrative emerges, ICX should be one of the coins to watch out for.
$ICX is one of the coins to watch if we get a korean narrative emerge alongside this Chinese one
Which will most likely happen
— CryptoShadow (@CryptoShadowOff) October 27, 2019
However, he did not provide a visual image of the chart of ICX — merely suggesting that the coin has potential.
Let’s look at its previous movement and see if the technical outlook on ICON has any merit.
ICON Price: Long-Term
The first thing visible when looking at the weekly ICON chart is that the ICX price is trading at an all-time low.
Furthermore, it recently broke down below a very significant support area, found between $0.18-$0.19. This area offered support from October 2018 to September 2017. A decrease below such a significant support area is a very bearish development, especially if it is sustained.
The ICON price is currently trading at $0.16 — slightly below this support area.
Looking at the RSI and MACD does nothing do mitigate our bearish outlook.
The RSI has not generated any bullish divergence and has yet to reach oversold values. The MACD is moving upward slightly and is almost into positive territory. However, there has been virtually no movement in the past two months, reducing the significance of its bullish position.
The technical outlook for ICX does not show a high potential for sustained growth. While positive news from South Korea could cause cryptocurrencies based on the country to increase, the current price position and its technical indicators provide a bearish outlook.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images are courtesy of Shutterstock, TradingView.
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