Price action anlysis
The initial phase, likely Phase A, marked the stopping of the previous downtrend. The low reached around the 24th could be identified as a Selling Climax (SC) or a significant low. The subsequent rally to near the 25th then established an Automatic Rally (AR), defining the upper boundary of the initial trading range. A following decline that tested the SC zone, around the 25th, would constitute a Secondary Test (ST). Following this, the price entered Phase B, the "building of the cause," where the "Composite Man" is presumed to be accumulating. From the ST on the 25th until near the 26th, the price moved laterally, repeatedly testing the support and resistance levels established by the SC and AR, with supports around $107K-$107K and resistance evolving from $109K towards $109-$110K The low on the 26th, reaching near $107K, is particularly noteworthy and could be interpreted as a Spring or an ST in Phase C, effectively a shakeout below prior support.
If this low on the 26th is indeed a Spring, then Phase C, the test, is confirmed by the immediate subsequent rally that did not retest this low with any significant force, indicating a lack of supply. This leads us into Phase D, characterized by a developing uptrend within the range and the potential for a breakout. The ascent starting late on the 26th and continuing to the current moment displays clear Signs of Strength (SOS). The price has broken through internal resistance levels within the range and is now challenging the upper boundary of the broader trading range, near $110K. Currently, the price at $109K is situated at a critical resistance zone, which notably coincides with the Point of Control (POC) indicated by the volume profile.
Volume Behavior Analysis:
The behavior of volume provides further context. During Phase A, volume at the SC, while not climactic, was significant compared to its immediate surroundings, and the volume on the AR was moderate. Crucially, volume during the ST on the 25th was markedly lower than at the SC, a positive sign for accumulation, suggesting diminishing selling pressure. Throughout Phase B, volume was somewhat erratic but generally decreased on successful tests of support. Some volume spikes were observed on upward movements testing resistance, indicating absorption of supply. The volume on the potential Spring on the 26th was moderate, which is acceptable if followed by a swift recovery on low-volume retests. In Phase D, the rally from late on the 26th has been accompanied by an increase in volume on bullish candles, especially during the breakout of internal resistance levels, supporting the SOS and indicating demand taking control. Current volume, as the price consolidates at the highs, is moderate.
RSI Behavior Analysis:
The Relative Strength Index (RSI) offers additional insights. A clear bullish divergence is evident when comparing the price low of the 25th with the low of the 26th; while the price made an equal or slightly lower low, the RSI formed a distinctly higher low. This classic signal supports the interpretation of a Spring or a final test of supply. During the accumulation phase, the RSI mostly oscillated below the 50-60 levels. With the onset of Phase D and the SOS, the RSI has crossed above and is maintaining itself above 50 (currently at 58.27), indicating a shift towards bullish momentum. It is not yet in overbought territory (above 70), suggesting potential for further upside if demand persists. The volume profile on the right shows the POC, the area of highest traded volume, situated precisely where the price is currently, around $109,7K - $109,8K. This area acts as a strong magnet and a significant potential resistance or support. Below this, a High Volume Node (HVN) around $108K could serve as strong support on pullbacks. Above the current POC, a Low Volume Node (LVN) exists before another minor HVN near $111K; LVNs are often traversed quickly if the price can overcome the current HVN.
Relevant Points to Consider for the Next 24 Hours:
Looking ahead for the next 24 hours, several key elements will be crucial. The immediate focus is on the price's ability to break and sustain above the current resistance and POC zone of $109,7K - $110K USDT. A confirmed breakout above $110K USDT, ideally accompanied by increasing volume, would validate the SOS and signal entry into Phase E, a markup phase, with potential targets around $110,5K and then the HVN near $111K. A pullback to this breakout zone that holds as support, forming a Last Point of Support (LPS), would be a strong bullish indication. Conversely, a failure to overcome this zone, especially with increasing selling volume, could lead to a retracement to test lower supports, initially around $109K-$109,2K, and then potentially the HVN at $108K. Volume during any breakout or rejection will be paramount; a low-volume breakout would be suspect (a potential Upthrust), while increased volume on a breakout would be confirmatory. For the RSI, if new price highs above $110K are achieved, it will be important to see if the RSI confirms with new highs or forms a bearish divergence, which could warn of short-term bullish exhaustion. Sustaining above RSI 50 is positive. From a Wyckoff perspective, if this is indeed Phase D, "Backups" or LPS testing the breakout area are normal. However, a failure of the structure, such as a decisive break below the Spring level (e.g., below 106,800), would invalidate the accumulation scenario and suggest either redistribution or a continuation of the prior downtrend.
The initial phase, likely Phase A, marked the stopping of the previous downtrend. The low reached around the 24th could be identified as a Selling Climax (SC) or a significant low. The subsequent rally to near the 25th then established an Automatic Rally (AR), defining the upper boundary of the initial trading range. A following decline that tested the SC zone, around the 25th, would constitute a Secondary Test (ST). Following this, the price entered Phase B, the "building of the cause," where the "Composite Man" is presumed to be accumulating. From the ST on the 25th until near the 26th, the price moved laterally, repeatedly testing the support and resistance levels established by the SC and AR, with supports around $107K-$107K and resistance evolving from $109K towards $109-$110K The low on the 26th, reaching near $107K, is particularly noteworthy and could be interpreted as a Spring or an ST in Phase C, effectively a shakeout below prior support.
If this low on the 26th is indeed a Spring, then Phase C, the test, is confirmed by the immediate subsequent rally that did not retest this low with any significant force, indicating a lack of supply. This leads us into Phase D, characterized by a developing uptrend within the range and the potential for a breakout. The ascent starting late on the 26th and continuing to the current moment displays clear Signs of Strength (SOS). The price has broken through internal resistance levels within the range and is now challenging the upper boundary of the broader trading range, near $110K. Currently, the price at $109K is situated at a critical resistance zone, which notably coincides with the Point of Control (POC) indicated by the volume profile.
Volume Behavior Analysis:
The behavior of volume provides further context. During Phase A, volume at the SC, while not climactic, was significant compared to its immediate surroundings, and the volume on the AR was moderate. Crucially, volume during the ST on the 25th was markedly lower than at the SC, a positive sign for accumulation, suggesting diminishing selling pressure. Throughout Phase B, volume was somewhat erratic but generally decreased on successful tests of support. Some volume spikes were observed on upward movements testing resistance, indicating absorption of supply. The volume on the potential Spring on the 26th was moderate, which is acceptable if followed by a swift recovery on low-volume retests. In Phase D, the rally from late on the 26th has been accompanied by an increase in volume on bullish candles, especially during the breakout of internal resistance levels, supporting the SOS and indicating demand taking control. Current volume, as the price consolidates at the highs, is moderate.
RSI Behavior Analysis:
The Relative Strength Index (RSI) offers additional insights. A clear bullish divergence is evident when comparing the price low of the 25th with the low of the 26th; while the price made an equal or slightly lower low, the RSI formed a distinctly higher low. This classic signal supports the interpretation of a Spring or a final test of supply. During the accumulation phase, the RSI mostly oscillated below the 50-60 levels. With the onset of Phase D and the SOS, the RSI has crossed above and is maintaining itself above 50 (currently at 58.27), indicating a shift towards bullish momentum. It is not yet in overbought territory (above 70), suggesting potential for further upside if demand persists. The volume profile on the right shows the POC, the area of highest traded volume, situated precisely where the price is currently, around $109,7K - $109,8K. This area acts as a strong magnet and a significant potential resistance or support. Below this, a High Volume Node (HVN) around $108K could serve as strong support on pullbacks. Above the current POC, a Low Volume Node (LVN) exists before another minor HVN near $111K; LVNs are often traversed quickly if the price can overcome the current HVN.
Relevant Points to Consider for the Next 24 Hours:
Looking ahead for the next 24 hours, several key elements will be crucial. The immediate focus is on the price's ability to break and sustain above the current resistance and POC zone of $109,7K - $110K USDT. A confirmed breakout above $110K USDT, ideally accompanied by increasing volume, would validate the SOS and signal entry into Phase E, a markup phase, with potential targets around $110,5K and then the HVN near $111K. A pullback to this breakout zone that holds as support, forming a Last Point of Support (LPS), would be a strong bullish indication. Conversely, a failure to overcome this zone, especially with increasing selling volume, could lead to a retracement to test lower supports, initially around $109K-$109,2K, and then potentially the HVN at $108K. Volume during any breakout or rejection will be paramount; a low-volume breakout would be suspect (a potential Upthrust), while increased volume on a breakout would be confirmatory. For the RSI, if new price highs above $110K are achieved, it will be important to see if the RSI confirms with new highs or forms a bearish divergence, which could warn of short-term bullish exhaustion. Sustaining above RSI 50 is positive. From a Wyckoff perspective, if this is indeed Phase D, "Backups" or LPS testing the breakout area are normal. However, a failure of the structure, such as a decisive break below the Spring level (e.g., below 106,800), would invalidate the accumulation scenario and suggest either redistribution or a continuation of the prior downtrend.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.