Gala has held at the $0.432 support throughout December, although it has seen an increasingly weaker bounce off the support. Buyers finally capitulated in early January, and selling pressure increased once again. The charts show a strong bearish outlook for Gala. It is not uncommon for altcoins to rally sharply for a few weeks before they recover nearly 80% of that gain. Some coins remain relevant in the market and consolidate for several weeks before recovering. Gala could be one of those coins? Where will the consolidation lie?
GALA- 1D
Source: GALA/USDT on TradingView
The move from $0.841 to $0.37 is used to chart the Fibonacci retracement and extension (white). Along with these levels, a key support at $0.432 has been identified, a level that buyers have defended throughout December.
At the time of writing, the price found some liquidity in the $0.37 area (red box), the December low, where buyers hoped for a bullish reaction. This is also the area where the price has rallied since late November. However, the buyers were exhausted and the price rushed straight through this area to hit a low of $0.308. It turned up to retest this area, confirming its shift from supply to demand.
Another area of demand was seen at $0.24 (cyan box). This area also has a confluence with a 27.2% expansion at $0.241.
After failing to hold $0.37, it is likely that in the next few days or weeks, GALA will drop to test the $0.241 area to look for buyers.
Theoretical basis
Source: GALA/USDT on TradingView
The RSI on the 12-hour chart has been rejected from 44 and below 40, at the time of writing. In the past, an RSI below 40 has often shown strong bearish pressure on GALA. The Aroon indicator also shows a strong bearish trend going on over the past few weeks.
The Elliot Wave Oscillator is based on the difference between the 5 and 35 period SMA and on the higher timeframes, the divergence on this indicator and the price could indicate a reversal.
Therefore, if the EWO forms a higher low in the coming weeks and the GALA is at or near the $0.24 area (higher low on the indicator but lower low in price, bullish divergence) it could This is a sign that buyers are starting to reverse the trend.
Inference
The Gala is in a strong downtrend and the retest of the old demand zone has created a good opportunity to sell short. Any short position from this area can look for profit at $0.30 and $0.24.