Current Situation
Yesterday, I exited my GALA position based on confirmation from the 4-hour timeframe. Although I considered waiting for a daily close to validate the bearish trend, the strong downward signals on the smaller timeframe prompted me to act earlier. This decision proved advantageous, as we experienced a significant price drop.
Broad Market Outlook:
Weekly Timeframe:
The Stochastic RSI has crossed bearish (K below D), indicating that momentum is firmly downward on the larger time horizon. This suggests a sustained correction phase.
Daily Timeframe:
The Stochastic RSI remains in bearish territory, confirming that the broader trend is aligned with the weekly bearish momentum.
4-Hour Timeframe:
The momentum indicators are at levels that suggest oversold conditions, indicating a potential for short-term support and a bounce.
Interpretation:
We are currently in a correction phase, and support levels are crucial to watch. Based on the broader timeframes, this correction may last a while as the weekly and daily momentum indicators cool off.
In the shorter term, the 4-hour chart suggests the potential for a bounce, but this will likely develop into a consolidation pattern, such as a channel or triangle, as the market stabilizes.
Key Levels to Watch:
Support: $0.04358: This aligns with strong monthly support and the golden pocket (0.618 Fibonacci retracement). If this level fails, the next likely target is the 0.786 Fibonacci level at $0.03980.
Resistance: $0.04882: A short-term ceiling where price may struggle to break out until momentum shifts on higher timeframes.
What to Look For Next:
4-Hour Momentum Indicators: Await signs of positive momentum (e.g., RSI crossing upwards or bullish Stochastic RSI) to confirm potential support.
Consolidation Pattern Formation: After finding support, expect price action to form a sideways channel or triangle pattern, likely bouncing between the identified support and resistance levels.
Longer-Term Cooling: The correction may persist until the daily and weekly momentum indicators reset, preparing for a stronger recovery phase.
Summary:
Immediate support is anticipated around $0.04358, with potential range-bound movement between $0.04358 and $0.04882 in the short term.
A deeper correction to $0.03980 remains possible if bearish momentum continues.
Patience is key—wait for confirmation of support and momentum shifts before re-entering or trading.
Yesterday, I exited my GALA position based on confirmation from the 4-hour timeframe. Although I considered waiting for a daily close to validate the bearish trend, the strong downward signals on the smaller timeframe prompted me to act earlier. This decision proved advantageous, as we experienced a significant price drop.
Broad Market Outlook:
Weekly Timeframe:
The Stochastic RSI has crossed bearish (K below D), indicating that momentum is firmly downward on the larger time horizon. This suggests a sustained correction phase.
Daily Timeframe:
The Stochastic RSI remains in bearish territory, confirming that the broader trend is aligned with the weekly bearish momentum.
4-Hour Timeframe:
The momentum indicators are at levels that suggest oversold conditions, indicating a potential for short-term support and a bounce.
Interpretation:
We are currently in a correction phase, and support levels are crucial to watch. Based on the broader timeframes, this correction may last a while as the weekly and daily momentum indicators cool off.
In the shorter term, the 4-hour chart suggests the potential for a bounce, but this will likely develop into a consolidation pattern, such as a channel or triangle, as the market stabilizes.
Key Levels to Watch:
Support: $0.04358: This aligns with strong monthly support and the golden pocket (0.618 Fibonacci retracement). If this level fails, the next likely target is the 0.786 Fibonacci level at $0.03980.
Resistance: $0.04882: A short-term ceiling where price may struggle to break out until momentum shifts on higher timeframes.
What to Look For Next:
4-Hour Momentum Indicators: Await signs of positive momentum (e.g., RSI crossing upwards or bullish Stochastic RSI) to confirm potential support.
Consolidation Pattern Formation: After finding support, expect price action to form a sideways channel or triangle pattern, likely bouncing between the identified support and resistance levels.
Longer-Term Cooling: The correction may persist until the daily and weekly momentum indicators reset, preparing for a stronger recovery phase.
Summary:
Immediate support is anticipated around $0.04358, with potential range-bound movement between $0.04358 and $0.04882 in the short term.
A deeper correction to $0.03980 remains possible if bearish momentum continues.
Patience is key—wait for confirmation of support and momentum shifts before re-entering or trading.
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.
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.