Based on the provided chart, which includes both price action and RSI (Relative Strength Index), here’s a detailed technical analysis:
1. Rising Wedge with Bearish RSI Divergence
The price is forming a rising wedge pattern, which is a bearish reversal signal.
The RSI shows bearish divergence, as the price is making higher highs while the RSI is making lower highs. This indicates weakening bullish momentum.
2. RSI Analysis
Overbought Level: RSI previously reached above 70 (overbought zone) but has since fallen, confirming a potential bearish bias.
Bearish Divergence: A clear signal of momentum loss as RSI fails to make new highs, while the price does. This divergence is often a precursor to a downward move.
Current RSI Level: RSI is around the 50 level, which is a neutral zone. A breakdown below 40 would confirm strong bearish momentum.
3. Key Price Levels
Support Zone: $0.396 – $0.40
This is a crucial support level. If the price breaks below this level, it would confirm the wedge breakdown.
Resistance Zone: $0.42 – $0.43
The price has struggled to break above this zone, showing seller dominance.
4. Volume Analysis
Volume appears to decrease as the wedge forms, which aligns with the pattern. A breakdown (or breakout) with a volume spike would confirm the direction.
5. Trading Scenarios
Bearish Breakdown:
Signal: Rising wedge breakdown with RSI dropping below 40.
Entry: Below $0.396, with a retest of the level.
Target:
TP1: $0.37 (first horizontal support).
TP2: $0.35 (measured move from wedge height).
Stop Loss: Above $0.42.
Bullish Breakout (Less Likely):
Signal: Price breaking above $0.43 with RSI reclaiming 60 or higher.
Entry: Above $0.43, with a retest.
Target:
TP1: $0.45.
TP2: $0.47 – $0.50.
Stop Loss: Below $0.40.
6. Risk Management
Use position sizing to manage risk. Only risk 1-2% of your capital per trade.
Set alerts for key levels: $0.396 (breakdown)
and $0.43 (breakout).
Let me know if you need more guidance or a chart annotation!
