The cryptocurrency market is demonstrating steady momentum today, even as both Bitcoin (BTC) and Ethereum (ETH) are trading in negative territory. Notably, several altcoins are maintaining their positions and exhibiting bullish indicators, with Plasma (XPL) being one such example.
Following a significant decline over the last 30 days, XPL is now showing early signs of a recovery. The token has appreciated by over 5% today, and crucially, its recent technical configuration suggests a potential for bullish continuation, driven by the formation of a harmonic pattern.
Harmonic Pattern Suggests Potential Upside Movement
On the 4-hour chart, XPL has developed a Bearish Butterfly harmonic pattern. While its name suggests a bearish outlook, this setup often precedes a strong bullish surge during the CD leg before reaching the Potential Reversal Zone (PRZ).
The pattern originated from Point X, located around $0.4345. This was followed by a sharp decrease to Point A, a subsequent recovery to Point B, and a pullback to Point C, which is situated near $0.3454. This corrective wave established the foundation of the pattern. Since then, XPL has experienced a consistent upward trend and is currently trading at approximately $0.3751.
The price is now approaching the 50-hour moving average, which is positioned near $0.3779 and acts as a significant short-term resistance level. The 100-hour moving average is located around $0.4087. A confirmed breakout above this combined moving average zone would likely validate the current CD leg, indicating a potential extension towards the PRZ.
Future Outlook for XPL
Should bullish momentum enable a sustained reclaim above these moving average levels, the harmonic pattern projects a potential upside target range between $0.4611 (representing a 1.272 Fibonacci extension) and $0.4950 (a 1.618 extension). This range constitutes the PRZ, where this type of harmonic formation typically concludes. Such a movement would signify a potential 27% increase from current price levels.
Conversely, if XPL fails to maintain its position above the 50-hour moving average support, momentum could temporarily wane, leading to a brief period of consolidation before any renewed upward attempt.
The critical support zone remains near Point C, at $0.3454. A breach of this level would invalidate the pattern, potentially leading to a short-term correction before any subsequent rebound efforts.