Did we actually break out of the downtrend?
Updated
Tezos recently broke a long term downtrend which appeared to signal the beginning of a trend reversal. Volume briefly picked up after this breakout which was promising. A retest of the trendline was to be expected and happened yesterday; however, the volume from this test is anything but promising. The volume has been anemic in general during this entire upward move and it's clear there are no strong buyers at current levels.
In addition to a weak bounce and poor volumes, the 4hr chart is painting an ugly head and shoulders pattern. The loss of volume in the right shoulder is a telltale sign of this pattern. If this pattern plays out, it will easily drive the price down to $3.00 - 3.20 levels.
I think it's likely we'll see another test of the downtrend line in the coming days with another, quicker and even weaker bounce, followed by a breakdown and a further collapse of the price to the demand zone around $3.00
I want to be wrong about this, so things to watch for that would invalidate this analysis are an increase in volume and the price pushing up past $4.60. If this happens, $5.00 and $5.80 are definitely back in play.
Not financial advice
In addition to a weak bounce and poor volumes, the 4hr chart is painting an ugly head and shoulders pattern. The loss of volume in the right shoulder is a telltale sign of this pattern. If this pattern plays out, it will easily drive the price down to $3.00 - 3.20 levels.
I think it's likely we'll see another test of the downtrend line in the coming days with another, quicker and even weaker bounce, followed by a breakdown and a further collapse of the price to the demand zone around $3.00
I want to be wrong about this, so things to watch for that would invalidate this analysis are an increase in volume and the price pushing up past $4.60. If this happens, $5.00 and $5.80 are definitely back in play.
Not financial advice
Note
Neckline has broken, I expect to see the pattern play out as expected
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.