I'll admit that I've been completely asleep on Theta, but at this point, its price action is pretty undeniable.
Let's take a look at what its done over the past few weeks:
As we can see from the chart above, from approximately December 11th to its peak around January 2nd, 2021 (just 22 days), Theta rose about +284%.
Which is significant.
At the time of writing, it has a $2 billion market cap and the drawdown that we see (consolidation) really accounts for all of the distance between its price point currently and the ATH that it may reach in the near future.
Overall, this is a buy - but we're going to see if we can find a very lucrative entry on this one.
Clear Bull Pennant Has Formed
Some may not see it, but there is a clear bull pennant on Theta (on the daily resolution), which is a bullish continuation pattern.
Below is a generic example of the type of price action that we should be expecting out of a bull pennant:
Here's another example (of a flag this time), from 'StockCharts', but flags & pennants essentially trade the same way.
This is really bullish for us.
Look at the price action for Theta. Its been going nuts and now its market cap is above the billion dollar mark, so we know that its a solid crypto at this point with relatively low volatility, all things considered.
At this point, it would be imprudent for us to miss out on Theta for any reason.
As far as the pennant goes, we just want to lock into a position during a period of low volatility (i.e., sideways movement on the price like what we saw in the chart above) and then chomp down on a good position, and when the market bites the bait that's when we slowly reel in the profits (learning to fish will make you a better trader).
Exponential Moving Averages
We probably didn't need to look at these, but its worth noting that Theta is moving with so much bullish energy that its actually testing the EMA-12 with a lot of continued success.
Here's a closer look (annotated):
The purple line is the EMA-12 in the chart above.
Relative Strength Index (14)
The Librehash RSI(14) is showing a lot of waning momentum:
Keep in mind that this does not mean that the price itself needs to decline along with the RSI(14), this just means that the strength of the trend is now decreasing.
Since we're in a bull trend, we know that the bulls are exhausted and that buy pressure that we saw pumping the price through the ceiling before is continuing to fade.
More than likely, the bulls will be back and ready for another round as there are few, if any real bears in this market (especially considering the fact that there are no derivatives / ways to short this project as is the case with most of the other projects in the blockchain space currently).
Librehash Balance of Power RSI
One of the favorites being pulled out of the shed again. Let's see what its telling us on the daily resolution:
Hmm. Ambiguous. There's not enough data for the Balance of Power RSI over the last few periods for us to make any definitive assessments about what the markets are saying about Theta.
We can see that the Balance of Power RSI has bounced from its 'extreme' (red marking) below the ob/os overlay, but there's no telling whether that will continue or simply die out.
See below for a depiction of the uncertainty:
Wrapping Up (Because We're Tired of This)
Listen, here's the deal - it feels almost inevitable that Theta is going to shake out of its consolidation and blow up at some point in the very near future.
But our general principle of investing is that we don't step in to take action based on what we expect to happen, but rather what the charts show us will happen.
And right now, there's nothing on the charts at this very second to suggest that this will happen (i.e., we could plop a decent chunk of change in Theta, only to see this consolidation continue for the next two months - perhaps; or maybe the project just dies from here out / scandal w the lead developer / etc.)
Take a look at how even the Librehash Reversion Ribbon V2 looks a tad bit ambiguous:
A good sign in the chart above though is that the candles for the last few periods are dark red, which indicates heavy, heavy sell pressure (relative to former price data).
Also, the histogram seems to indicate that Theta has gotten through the worst of it, but there may be a bit more "storm" left to go (i.e., consolidation, perhaps a slight slip further - regardless of whether Bitcoin is winning or not if we're going to use prior price action as a benchmark):
That Means That We're Going to Monitor and Observe
Yup. We're going to closely monitor this one until it does what we're looking for it to do.
How Can You Monitor?
Just set a price alarm around $2.08 or so (that's a decent enough bit above the price to where it would be warranted to check on the price action for Theta).