When analyzing whether the market pullback has ended, you can refer to the following indicators and methods:
1. Technical Analysis
(1) Key Support Levels:
Confirm whether the price is stabilizing near important support levels (such as previous lows or significant moving averages). If the price tests the support level multiple times without breaking it, the pullback may be nearing its end.
(2) Technical Indicators:
RSI (Relative Strength Index): An RSI value below 30 indicates oversold conditions and a possible rebound.
MACD (Moving Average Convergence Divergence): A bullish crossover, or a shortening of the green bars, indicates a weakening of downward momentum.
Moving Average System: A short-term moving average stopping its decline and turning upwards is a signal that the pullback has ended.
(3) Pattern Analysis:
Look for the appearance of double bottoms, reversal hammers, and other reversal patterns.
2. Changes in Trading Volume
At the end of a pullback, it is usually accompanied by a decrease in volume, while the start of a rebound is accompanied by an increase in volume.
Volume divergence (new price lows but no new highs in volume) may indicate a reversal.
3. Fundamental Signals
(1) Exhaustion of Negative News:
If the news that led to the decline has been fully digested by the market, and there are no larger negative factors to follow, the pullback may be nearing its end.
(2) Fund Flow:
Check if large funds (such as institutions or whale addresses) are re-entering the market. If funds are flowing back in, it indicates that market confidence is recovering.
4. Market Sentiment
(1) When market panic reaches an extreme (such as the Fear & Greed Index being in extreme fear), it may signify that the selling pressure is nearing its end.
(2) Pay attention to the heat of discussions on social media and the statements of key figures; extreme emotions are often a precursor to reversals.
5. Multi-Cycle Analysis
Comparative observation from short, medium, and long-term candlestick cycles: If the rebound trend in the short cycle gradually affects the medium to long-term trend, the signal for the end of the pullback becomes clearer.
6. Signals for Stopping the Decline
(1) Alternating Bullish and Bearish Candles: After a continuous decline, the appearance of a bullish candle engulfing a bearish candle indicates a change in market power.
(2) Higher Highs and Higher Lows: If there are noticeable higher highs and higher lows in the short term, the pullback may have ended.