Wyckoff Distribution in Play
The chart is clearly in a Wyckoff distribution phase, a critical indicator of a potential market top. After the initial Preliminary Supply (PSY), we saw a sharp Buying Climax (BC), where buying pressure peaked. This was followed by an Automatic Reaction (AR) and a series of lower highs and lower lows. The Sign of Weakness (SOW) in Phase B further confirmed weakening momentum.
As we move through Phase C, the Last Point of Supply (LPSY) emerges, signaling the final efforts by institutional players to distribute their holdings before the downtrend accelerates. The current market is consolidating within this final distribution phase, setting up for a potential sharp drop.
Elliott Wave Structure Confirms Downside
An Elliott Wave pattern provides additional confirmation. A completed 5-wave impulsive structure to the upside is visible, culminating near the top at Wave (Z). The market is now in the midst of a corrective wave, marked by (A), (B), and (C) formations.
Divergence on the momentum oscillator further validates the weakening bullish trend, with prices rising while momentum falls, a classic signal of an impending reversal. Wave (i) of the next bearish impulse appears underway, with waves (ii) and (iii) set to follow, pushing prices lower.
Harmonic and ICT Confluence
Fibonacci retracement levels (notably 0.786 and 0.866) converge near the current highs, indicating a critical reversal zone around 191.391 to 192.173. This aligns with key ICT (Inner Circle Trader) concepts like Optimal Trade Entry (OTE), reinforcing the idea that the market is in a premium zone, ripe for short positions.
The chart also emphasizes a strong Break of Structure (BOS) in Phase B, marking a significant shift in market dynamics. Institutional traders are likely targeting liquidity below, especially with a Point of Control (POC) around 185.825, where high-volume trading previously occurred.
Key Levels to Watch
Current High (Wave (Z)): 192.303 acts as a major resistance and invalidation point for further upside.
Support Line (AR Distribution): 189.052 serves as an intermediate target, with significant support below at 185.825, where the 1W close and POC are located.
Equilibrium Zone: Sitting near 189.064, this midpoint between the recent highs and lows offers a key battleground for bulls and bears.
Bearish Outlook Ahead
As the market completes its Wyckoff distribution and Elliott Wave correction, the probability of a continued decline grows. Momentum divergence, along with the confluence of harmonic retracements and ICT methodologies, strongly suggests that the distribution phase will conclude with a move towards lower liquidity zones.
Traders should watch for price to fall into the discount zone, with an immediate target of 185.825 and potentially lower in the coming sessions. With all technical signals pointing to a bearish reversal, this could be a critical moment for short-sellers to capitalize on the evolving market structure.
The chart is clearly in a Wyckoff distribution phase, a critical indicator of a potential market top. After the initial Preliminary Supply (PSY), we saw a sharp Buying Climax (BC), where buying pressure peaked. This was followed by an Automatic Reaction (AR) and a series of lower highs and lower lows. The Sign of Weakness (SOW) in Phase B further confirmed weakening momentum.
As we move through Phase C, the Last Point of Supply (LPSY) emerges, signaling the final efforts by institutional players to distribute their holdings before the downtrend accelerates. The current market is consolidating within this final distribution phase, setting up for a potential sharp drop.
Elliott Wave Structure Confirms Downside
An Elliott Wave pattern provides additional confirmation. A completed 5-wave impulsive structure to the upside is visible, culminating near the top at Wave (Z). The market is now in the midst of a corrective wave, marked by (A), (B), and (C) formations.
Divergence on the momentum oscillator further validates the weakening bullish trend, with prices rising while momentum falls, a classic signal of an impending reversal. Wave (i) of the next bearish impulse appears underway, with waves (ii) and (iii) set to follow, pushing prices lower.
Harmonic and ICT Confluence
Fibonacci retracement levels (notably 0.786 and 0.866) converge near the current highs, indicating a critical reversal zone around 191.391 to 192.173. This aligns with key ICT (Inner Circle Trader) concepts like Optimal Trade Entry (OTE), reinforcing the idea that the market is in a premium zone, ripe for short positions.
The chart also emphasizes a strong Break of Structure (BOS) in Phase B, marking a significant shift in market dynamics. Institutional traders are likely targeting liquidity below, especially with a Point of Control (POC) around 185.825, where high-volume trading previously occurred.
Key Levels to Watch
Current High (Wave (Z)): 192.303 acts as a major resistance and invalidation point for further upside.
Support Line (AR Distribution): 189.052 serves as an intermediate target, with significant support below at 185.825, where the 1W close and POC are located.
Equilibrium Zone: Sitting near 189.064, this midpoint between the recent highs and lows offers a key battleground for bulls and bears.
Bearish Outlook Ahead
As the market completes its Wyckoff distribution and Elliott Wave correction, the probability of a continued decline grows. Momentum divergence, along with the confluence of harmonic retracements and ICT methodologies, strongly suggests that the distribution phase will conclude with a move towards lower liquidity zones.
Traders should watch for price to fall into the discount zone, with an immediate target of 185.825 and potentially lower in the coming sessions. With all technical signals pointing to a bearish reversal, this could be a critical moment for short-sellers to capitalize on the evolving market structure.
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.