RED WAVE OVERVIEW
Current Drop: Double-digit dips like these (-12% range) typically indicate:
High leverage being flushed
Panic selling, especially in meme/speculative tokens
Potential liquidity grabs by larger players ("stop hunts")
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Action Plan for Traders
1. Oversold Signals
Use RSI (<30) and stochastic indicators to confirm oversold conditions.
Check volume divergence: If price drops but volume fades, it could signal exhaustion.
2. Reversal Watch
Look for:
Hammer candles / bullish engulfing patterns
Volume spike with price stabilization
Support levels from previous consolidation zones or Fibonacci retracements (0.618 is key)
3. Trade Smart, Not Fast
Don’t chase falling knives—wait for structure (like a higher low) before entry.
Set tight stop-losses just under local lows.
For bounce plays, target 8–15% moves; for mid-term, re-evaluate at key resistance levels.
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Token-Specific Risk Snapshot
Token Sentiment Cautionary Notes
$SAGA Volatile layer-1 narrative Watch dev/user metrics—pure hype prone
#RDNT DeFi yield-driven Susceptible to liquidity crunches
$AIXBT Likely AI narrative play High volatility, low liquidity risk
$BOME Meme token Crowd psychology driven—fast in/out moves
#BONK Doge/Solana meme cousin Community-heavy but hype-fueled