We are examining the possibility of another leg down in this several-month long downtrend.
Price has respected the multy-year trendline (in white), for now, but this could turn into another bull trap, as it has also respected the downtrend channel resistance. Both the daily 200 EMA and the 125 MA have converged and stopped price breakouts three times already. As per the RSI, we haven't seen a violent move up and above the 70 area, rather we are seeing 'strenght' similar to previous reversals. This, combined with signals from the TD 9 sequential I believe points to a more likely scenario, in which we see the price moving further down in the trend channel.
In this market structure, I believe the next range would be the weekly 200 EMA - It coincides perfectly with the 0.618 FIB level at around $5640, so if there's no rally on high volume soon, I'll be watching it if price reverses.
Notwhitstanding how difficult it is to time a reversal based on divergences, a case could be made that a bull divergence might be forming on the RSI down the line, should the price retrace back down and respect the support on the indicator.
Price has respected the multy-year trendline (in white), for now, but this could turn into another bull trap, as it has also respected the downtrend channel resistance. Both the daily 200 EMA and the 125 MA have converged and stopped price breakouts three times already. As per the RSI, we haven't seen a violent move up and above the 70 area, rather we are seeing 'strenght' similar to previous reversals. This, combined with signals from the TD 9 sequential I believe points to a more likely scenario, in which we see the price moving further down in the trend channel.
In this market structure, I believe the next range would be the weekly 200 EMA - It coincides perfectly with the 0.618 FIB level at around $5640, so if there's no rally on high volume soon, I'll be watching it if price reverses.
Notwhitstanding how difficult it is to time a reversal based on divergences, a case could be made that a bull divergence might be forming on the RSI down the line, should the price retrace back down and respect the support on the indicator.