The Small Love Potion (SLP) has been going downhill since it completed a double top pattern on July 13th.
SLP struggles to maintain price after Axie Infinity is subject to income tax, it has declined along a downward resistance line since then, and has hit a low of $0.138 so far.
SLP has been moving down since completing a double top pattern on July 16th (red icons). The decrease took the form of a descending wedge.
More recently, the SLP was rejected on August 24th and created a bearish candlestick. The rejection came in the wake of the announcement Philippines’ Undersecretary that profits from games like Axie Infinity are subject to income tax.
- SLP strives to maintain price after Axie Infinity is subject to income tax.
Despite the fact that the falling wedge is considered a bullish pattern, technical indicators are bearish. MACD is negative, RSI is below 50 and supertrend is down.
However, the SLP is approaching the horizontal support area of $0.115. Given that it coincides with the support line of the wedge, a breakout of it would be likely, even if it does not lead to a sustained uptrend.
Future SLP Movement
Cryptocurrency trader @Thebull_crypto has drawn an SLP chart, claiming the break could take it as low as 25 cents.
However, the token has broken since the tweet. Despite this, it is approaching the long-term support area outlined in the previous section.
In addition, both the RSI and MACD generated bullish divergences, even though they have not yet been confirmed.
If a breakout occurs, the next closest resistance would be $0.22. However, due to daily time span readings, this does not mean that the trend has turned bullish.