The pancake retreated after a surge yesterday, ultimately closing with a solid bearish K-line below the 114000 range. This pattern echoes the trend after the surge to 116380 on October 27 and the subsequent retreat.
In the early hours, it briefly tested the 114500 resistance line but failed to achieve an effective breakthrough. The subsequent selling pressure led to a gradual decline in prices, confirming the strong resistance nature of the 114500-115000 range.
The 4-hour chart shows that after reaching 116380, the KDJ indicator's J value rose to the overbought area of 91.18, and then, alongside the price retreat, the J value quickly declined, forming a "top divergence" signal. The current price has fallen below the short-term support of 114000, moving toward the key support level of 111000. This location is not only your target but also a strong support zone that has been validated multiple times since May.
Although the daily level has not completely destroyed the previous rising channel, the solid bearish K-line continues to expand, and the trading volume has not increased accordingly, showing a weak characteristic of "price decline with volume shrinkage." If it subsequently breaks below 111000, it will further open up downward space, and the next strong support to watch is the 107700-108700 range.
On one hand, the technical correction demand after being overbought is significant, with the area around 115000 acting as a dense zone of previous highs. The trapped positions' selling pressure combines with short-term profit-taking to create a strong force; on the other hand, there is currently a lack of new positive narrative support, and the expectation of interest rate cuts at the end of the month has already been partially digested. If the market cannot break through the key resistance, it is likely to trigger a loosening of bullish confidence.
The support level below 111000 overlaps with the strong support zone at 106600. If effective support can be formed, a short-term rebound may occur. However, it must be noted that if the rebound cannot return above 114500, it will constitute a "continuation of the decline" pattern, which would instead reinforce the downward trend.
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