Price Action Analysis:
Observing the price action from May 23rd to May 26th, the chart suggests the development of a Wyckoff accumulation schematic. The initial phase, Phase A, marked the stopping of the previous downtrend. This began with a Selling Climax (SC), where price bottomed near the $107,3K level due to panic selling being absorbed by larger interests. This was followed by an Automatic Rally (AR) to approximately $110K, which established the upper boundary of the subsequent trading range. Subsequent declines, like those served as Secondary Tests (STs) of the SC area.
Phase B represented the "building of the cause," where the "Composite Operator" accumulated positions. This phase extended from the AR, with price trading largely sideways between roughly $107K and $109,8K. The Volume Profile Visible Range (VPVR) highlights a significant Point of Control (POC) near $107,3K during this period, indicating substantial trading activity and value acceptance in the lower part of this range.
Phase C involved a critical test of supply. The dip observed around towards the $106,8K level, testing the SC/ST lows, can be interpreted as a Spring. This maneuver is designed to mislead uninformed traders and assess remaining supply, with price quickly recovering above the range's support.
Following the test, Phase D began, signifying the trend emerging out of the range and its confirmation. A clear Sign of Strength (SOS) occurred with the strong rally. This move decisively broke above the Phase B trading range resistance ($109,8K) and reached approximately $110,4K, indicating that demand had overcome supply. Currently, the price action on May 26th, consolidating above the broken resistance (now support) around the $109,6K-$109,9K area, is characteristic of a Last Point of Support (LPS) or a Back-Up (BU) to the "creek." This area also aligns with a new prominent POC on the VPVR, suggesting it's a new level of value acceptance.
Volume Behavior Analysis:
Volume patterns have closely supported the Wyckoff schematic. The Selling Climax on May 23rd was accompanied by a distinct volume spike, indicative of a significant transfer of shares. Volume during the subsequent Automatic Rally and Secondary Tests was generally lower, signaling diminishing selling pressure. The Spring on May 25th showed notable volume, suggesting a final cleanout of supply, but the ensuing rally demonstrated demand's ability to absorb this. Critically, the Sign of Strength breakout rally on May 25th occurred with a significant increase in volume, validating the upward thrust. During the current LPS/BU consolidation, volume has generally decreased, which is a constructive sign, suggesting light selling pressure as the new support level is tested.
RSI Behavior Analysis:
The Relative Strength Index (RSI) has also provided confirming signals. During the Selling Climax, the RSI likely dipped into oversold territory (below 30). Throughout Phase B, it oscillated primarily in the neutral zone, reflecting the range-bound price action, and may have formed bullish divergences. The Spring might have seen the RSI briefly dip or form another bullish divergence. Importantly, during the Sign of Strength, the RSI surged upwards with the price, likely approaching or entering overbought territory (above 70), confirming strong bullish momentum. In the current LPS/BU phase, the RSI has pulled back from its highs and is now around 46.58, a neutral reading. This cooldown is typical after an impulsive move and provides room for a potential next leg up.
Primary Trend, Signs of Strength, and Weakness:
The trend prior to May 23rd was likely bearish. However, the successful development of the Wyckoff accumulation structure and the subsequent SOS indicate that the emerging primary trend is now considered bullish for the short to medium term.
Signs of strength for this new bullish trend include the completed accumulation schematic, the decisive SOS breakout with increased volume, the price holding above the broken resistance (now support) during the LPS/BU phase (around $109,6K-$109,8K), diminishing volume on the pullback, and the RSI cooling off to neutral. The new POC forming at the LPS/BU level further reinforces this area as a value zone.
Signs of weakness to watch for would include the price failing to hold the current LPS/BU support, a significant increase in selling volume on rally attempts, the price falling back into the previous trading range, or the RSI breaking down or forming significant bearish divergences.
Relevant Points to Consider for the Next 24 Hours:
Over the next 24 hours, the price action around the key support zone of $109,5K to $109,9K (LPS/BU) will be critical. Holding above this, especially with low volume on any dips, would signal continued strength. Volume confirmation is essential: any attempt to rally from the current consolidation and break the recent high around $110,4K should be accompanied by an increase in volume. The RSI should ideally confirm new price highs or hold above 40-50 on tests of support. The immediate resistance is the recent high around $110,4K. A sustained break above this with good volume would signal the continuation of the markup phase. Should the current LPS/BU fail, the next significant support to watch would be the $107K - $107,3K zone. The market is in a post-SOS consolidation, and the immediate future will determine if the markup resumes or if further testing is needed.
Observing the price action from May 23rd to May 26th, the chart suggests the development of a Wyckoff accumulation schematic. The initial phase, Phase A, marked the stopping of the previous downtrend. This began with a Selling Climax (SC), where price bottomed near the $107,3K level due to panic selling being absorbed by larger interests. This was followed by an Automatic Rally (AR) to approximately $110K, which established the upper boundary of the subsequent trading range. Subsequent declines, like those served as Secondary Tests (STs) of the SC area.
Phase B represented the "building of the cause," where the "Composite Operator" accumulated positions. This phase extended from the AR, with price trading largely sideways between roughly $107K and $109,8K. The Volume Profile Visible Range (VPVR) highlights a significant Point of Control (POC) near $107,3K during this period, indicating substantial trading activity and value acceptance in the lower part of this range.
Phase C involved a critical test of supply. The dip observed around towards the $106,8K level, testing the SC/ST lows, can be interpreted as a Spring. This maneuver is designed to mislead uninformed traders and assess remaining supply, with price quickly recovering above the range's support.
Following the test, Phase D began, signifying the trend emerging out of the range and its confirmation. A clear Sign of Strength (SOS) occurred with the strong rally. This move decisively broke above the Phase B trading range resistance ($109,8K) and reached approximately $110,4K, indicating that demand had overcome supply. Currently, the price action on May 26th, consolidating above the broken resistance (now support) around the $109,6K-$109,9K area, is characteristic of a Last Point of Support (LPS) or a Back-Up (BU) to the "creek." This area also aligns with a new prominent POC on the VPVR, suggesting it's a new level of value acceptance.
Volume Behavior Analysis:
Volume patterns have closely supported the Wyckoff schematic. The Selling Climax on May 23rd was accompanied by a distinct volume spike, indicative of a significant transfer of shares. Volume during the subsequent Automatic Rally and Secondary Tests was generally lower, signaling diminishing selling pressure. The Spring on May 25th showed notable volume, suggesting a final cleanout of supply, but the ensuing rally demonstrated demand's ability to absorb this. Critically, the Sign of Strength breakout rally on May 25th occurred with a significant increase in volume, validating the upward thrust. During the current LPS/BU consolidation, volume has generally decreased, which is a constructive sign, suggesting light selling pressure as the new support level is tested.
RSI Behavior Analysis:
The Relative Strength Index (RSI) has also provided confirming signals. During the Selling Climax, the RSI likely dipped into oversold territory (below 30). Throughout Phase B, it oscillated primarily in the neutral zone, reflecting the range-bound price action, and may have formed bullish divergences. The Spring might have seen the RSI briefly dip or form another bullish divergence. Importantly, during the Sign of Strength, the RSI surged upwards with the price, likely approaching or entering overbought territory (above 70), confirming strong bullish momentum. In the current LPS/BU phase, the RSI has pulled back from its highs and is now around 46.58, a neutral reading. This cooldown is typical after an impulsive move and provides room for a potential next leg up.
Primary Trend, Signs of Strength, and Weakness:
The trend prior to May 23rd was likely bearish. However, the successful development of the Wyckoff accumulation structure and the subsequent SOS indicate that the emerging primary trend is now considered bullish for the short to medium term.
Signs of strength for this new bullish trend include the completed accumulation schematic, the decisive SOS breakout with increased volume, the price holding above the broken resistance (now support) during the LPS/BU phase (around $109,6K-$109,8K), diminishing volume on the pullback, and the RSI cooling off to neutral. The new POC forming at the LPS/BU level further reinforces this area as a value zone.
Signs of weakness to watch for would include the price failing to hold the current LPS/BU support, a significant increase in selling volume on rally attempts, the price falling back into the previous trading range, or the RSI breaking down or forming significant bearish divergences.
Relevant Points to Consider for the Next 24 Hours:
Over the next 24 hours, the price action around the key support zone of $109,5K to $109,9K (LPS/BU) will be critical. Holding above this, especially with low volume on any dips, would signal continued strength. Volume confirmation is essential: any attempt to rally from the current consolidation and break the recent high around $110,4K should be accompanied by an increase in volume. The RSI should ideally confirm new price highs or hold above 40-50 on tests of support. The immediate resistance is the recent high around $110,4K. A sustained break above this with good volume would signal the continuation of the markup phase. Should the current LPS/BU fail, the next significant support to watch would be the $107K - $107,3K zone. The market is in a post-SOS consolidation, and the immediate future will determine if the markup resumes or if further testing is needed.
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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.