LINK - Losing Momentum: Key Breakdown Levels to Watch
2024-12-17
Category: None

The chart structure shows a rising wedge pattern, a bearish formation that signals exhaustion in the current uptrend. This pattern, combined with price action stalling at the highs, indicates that the bulls are losing momentum.

 Key Observations: 

1.) Rising Wedge Breakdown Potential:

The price action is forming lower highs and higher lows, aligning with the typical characteristics of a rising wedge.

A decisive break below pdVAL (Previous Day Value Area Low) at $28.99 would confirm the bearish momentum.

2.) Bearish Targets:

If pdVAL fails as support, we could see a correction towards key confluence zones:

 First Target:  $26.75 — This level aligns with the 0.5 Fibonacci retracement of the entire upward wave and coincides with previous price structure support.

 Second Target:  $26.09 — This level is marked by the pwOpen (Previous Week Open), providing additional support.

3.) Volume Profile:

The recent upward move lacked increasing volume, which reinforces the exhaustion narrative. A volume spike on the breakdown would further validate the bearish case.

4.) Support Zones:

The key green zone (highlighted) between $26.75 and $26.09 is a strong area of demand, supported by:

 
 0.5 Fibonacci retracement.
 

 
 Previous Weekly Open (pwOpen) and Previous Weekly Value Area Low (pwVAL).
 

Conclusion:

Bearish Scenario: A confirmed breakdown of pdVAL ($28.99) could trigger a move towards $26.75, with potential continuation to $26.09.

Invalidation: A strong reclaim of pdVAL and a push above the rising wedge's resistance would invalidate the bearish outlook.
