Trade Setup Overview:
Short Entry Zone: $382 – $385
Take-Profit (TP): $365
Stop-Loss (SL): $387
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Market Structure & Technical Breakdown:
The
$TAO /USDT pair has recently experienced a sharp upward move, climbing aggressively toward the $383–$386 resistance zone, a historically significant supply area. However, this rally now appears overextended, and momentum is visibly weakening.
The price is struggling to hold above resistance, with multiple upper wick rejections and signs of a double-top formation on the lower timeframes. This behavior is a classic sign of bullish exhaustion, suggesting that buyers are losing strength and sellers may begin to take control.
This presents a strong shorting opportunity, especially for swing traders or day traders looking to capitalize on a high-probability reversal.
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Why This is a High-Conviction Short:
1. Rejection at Resistance:
The $383–$386 zone has acted as a major supply region in the past. Price has once again entered this zone and is failing to close above it, with long wicks indicating seller dominance.
2. Potential Double Top:
A double-top pattern, often viewed as a bearish reversal signal, appears to be forming. This adds technical weight to the idea that the rally has peaked.
3. Weak Volume on the Upside:
The recent push into resistance lacked strong volume, signaling that buyers are either hesitant or exhausted. A volume spike on a breakdown below $379 could trigger an accelerated move downwards.
4. Clean Risk-Reward:
With a tight stop-loss above $387, and a clearly defined target at $365, the risk-to-reward ratio is highly favorable. The trade allows for limited downside risk with meaningful profit potential.
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What to Expect Next?
If the price breaks below the immediate support at $379, we could see a swift move toward the $365 level. This area aligns with both horizontal support and minor demand.
Should bearish pressure intensify and $365 fails to hold, the next logical target is around $357, offering traders additional downside opportunity.
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Conclusion: Ride the Shift Before Momentum Leaves You Behind
This trade is not just about catching a drop — it’s about reading market sentiment and acting when momentum begins to shift.
Early entries often outperform late confirmations, especially in setups where price shows clear weakness after strong rallies. This is your rejection zone trigger. All technical signs point toward a short-term reversal, and this is your moment to catch the wave before it breaks.
> Join the smart money. Be ahead of the crowd. Position before the dive.
#TAO #noobtoprotrader $TAO