Hey traders! 👋
I’ve been watching this chart closely and spotted something that might interest you — a potential breakout from a descending channel. But while the bulls are showing some signs of life, we also need to consider the possibility of a continuation to the downside.
Let’s break it down together.
🧠 Market Context
The market has been trading inside a descending channel, creating lower highs and lower lows — a typical bearish trend structure. However, recent price action shows the bulls testing the upper boundary, hinting at a potential shift in momentum.
📊 Chart Breakdown
🔻 Descending Channel
The price has respected the descending channel for a while, bouncing between the upper resistance and lower support. The current movement shows price pushing against the upper trendline, which could indicate a breakout is underway.
🔍 Key Technical Clues
Breakout Attempt in Progress
Price is testing the upper boundary of the channel. A confirmed breakout would require a strong candle close above the trendline supported by volume.
Volume Spike
Noticeable volume increase near the support zone and again during this breakout attempt — this could signal buyer interest.
Ichimoku Confirmation
The price has crossed above the Kijun-sen (orange line), and the flat Kumo cloud is providing a base of support — both are potential bullish indicators.
Strong Support Zone
The red horizontal zone marks a significant support level that has held in the past. The recent bounce from this area adds weight to the bullish case.
🎯 Take-Profit Levels
If this breakout holds, we could target the following levels:
TP1 – Nearest resistance after the breakout
TP2 – Midway target aligned with previous consolidation
TP3 – A stretch target near earlier highs or Fibonacci extensions
🔮 Trade Scenarios: Two Possible Outcomes
✅ Bullish Breakout
If the price closes above the descending channel with strong volume:
This would confirm the breakout.
Potential long setup with targets at TP1, TP2, and TP3.
A stop-loss can be placed just below the breakout area or below the Kijun-sen for tighter risk management.
⚠️ Bearish Continuation (Fakeout Risk)
This setup is not guaranteed to break out — we must consider the possibility of a failed breakout or a bull trap, especially if:
The price gets rejected at the upper trendline and closes back inside the channel.
There’s no follow-through from buyers or volume fades.
A bearish candlestick pattern (e.g., bearish engulfing) forms near resistance.
If this happens:
The price could resume the downtrend within the channel.
A break below the red support zone might even lead to a retest of the all-time low.
🛡️ How to Trade This?
Wait for Confirmation — Don’t jump in until a breakout candle closes above the trendline with strong volume.
Set Alerts — Monitor price behavior at the resistance and support zones.
Protect Your Capital — Use proper stop-losses and position sizing.
📌 Final Thoughts
This is a classic case of a potential trend reversal — but until confirmed, it’s just a setup. Whether we see a breakout or a rejection, this is a great chart to learn from and prepare for both outcomes.
📢 What do you think? Will the bulls break through, or are we heading lower? Drop your thoughts and analysis in the comments — let’s discuss!
Happy trading, and remember to always manage your risk! 💹
I’ve been watching this chart closely and spotted something that might interest you — a potential breakout from a descending channel. But while the bulls are showing some signs of life, we also need to consider the possibility of a continuation to the downside.
Let’s break it down together.
🧠 Market Context
The market has been trading inside a descending channel, creating lower highs and lower lows — a typical bearish trend structure. However, recent price action shows the bulls testing the upper boundary, hinting at a potential shift in momentum.
📊 Chart Breakdown
🔻 Descending Channel
The price has respected the descending channel for a while, bouncing between the upper resistance and lower support. The current movement shows price pushing against the upper trendline, which could indicate a breakout is underway.
🔍 Key Technical Clues
Breakout Attempt in Progress
Price is testing the upper boundary of the channel. A confirmed breakout would require a strong candle close above the trendline supported by volume.
Volume Spike
Noticeable volume increase near the support zone and again during this breakout attempt — this could signal buyer interest.
Ichimoku Confirmation
The price has crossed above the Kijun-sen (orange line), and the flat Kumo cloud is providing a base of support — both are potential bullish indicators.
Strong Support Zone
The red horizontal zone marks a significant support level that has held in the past. The recent bounce from this area adds weight to the bullish case.
🎯 Take-Profit Levels
If this breakout holds, we could target the following levels:
TP1 – Nearest resistance after the breakout
TP2 – Midway target aligned with previous consolidation
TP3 – A stretch target near earlier highs or Fibonacci extensions
🔮 Trade Scenarios: Two Possible Outcomes
✅ Bullish Breakout
If the price closes above the descending channel with strong volume:
This would confirm the breakout.
Potential long setup with targets at TP1, TP2, and TP3.
A stop-loss can be placed just below the breakout area or below the Kijun-sen for tighter risk management.
⚠️ Bearish Continuation (Fakeout Risk)
This setup is not guaranteed to break out — we must consider the possibility of a failed breakout or a bull trap, especially if:
The price gets rejected at the upper trendline and closes back inside the channel.
There’s no follow-through from buyers or volume fades.
A bearish candlestick pattern (e.g., bearish engulfing) forms near resistance.
If this happens:
The price could resume the downtrend within the channel.
A break below the red support zone might even lead to a retest of the all-time low.
🛡️ How to Trade This?
Wait for Confirmation — Don’t jump in until a breakout candle closes above the trendline with strong volume.
Set Alerts — Monitor price behavior at the resistance and support zones.
Protect Your Capital — Use proper stop-losses and position sizing.
📌 Final Thoughts
This is a classic case of a potential trend reversal — but until confirmed, it’s just a setup. Whether we see a breakout or a rejection, this is a great chart to learn from and prepare for both outcomes.
📢 What do you think? Will the bulls break through, or are we heading lower? Drop your thoughts and analysis in the comments — let’s discuss!
Happy trading, and remember to always manage your risk! 💹
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.