Parabolic Run-Up Followed by a Sharp Decline
• Both patterns exhibit a strong rally leading into a rounded top formation before experiencing a steep decline.
• This suggests a classic distribution phase followed by a downtrend.
2. Top Formation & Reversal
• In both cases, the price reaches a peak and forms a lower high structure before starting its descent.
• This indicates potential selling pressure increasing at higher levels.
3. Volume Profile
• There is increased volume near the peak and during the decline, showing distribution and panic selling.
• This reflects a shift in sentiment, from bullish enthusiasm to risk-off behavior.
4. Downtrend Acceleration
• After breaking key support levels, the downtrend accelerates, leading to rapid sell-offs in both cases.
Key Differences:
• The first pattern (older) shows a more dramatic sell-off after the top, likely due to external macro factors.
• The second pattern, while following a similar structure, has not yet fully confirmed whether the decline will match the first in magnitude or find stronger support.
Implication:
If history repeats, price may continue declining after a brief consolidation. However, external conditions (macro factors, interest rates, liquidity) will influence whether the pattern fully plays out as before.
• Both patterns exhibit a strong rally leading into a rounded top formation before experiencing a steep decline.
• This suggests a classic distribution phase followed by a downtrend.
2. Top Formation & Reversal
• In both cases, the price reaches a peak and forms a lower high structure before starting its descent.
• This indicates potential selling pressure increasing at higher levels.
3. Volume Profile
• There is increased volume near the peak and during the decline, showing distribution and panic selling.
• This reflects a shift in sentiment, from bullish enthusiasm to risk-off behavior.
4. Downtrend Acceleration
• After breaking key support levels, the downtrend accelerates, leading to rapid sell-offs in both cases.
Key Differences:
• The first pattern (older) shows a more dramatic sell-off after the top, likely due to external macro factors.
• The second pattern, while following a similar structure, has not yet fully confirmed whether the decline will match the first in magnitude or find stronger support.
Implication:
If history repeats, price may continue declining after a brief consolidation. However, external conditions (macro factors, interest rates, liquidity) will influence whether the pattern fully plays out as before.
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.