Intraday Bounce and Potential Pattern
Buyers emerged after the $2.96 low, sparking an intraday rebound that lifted prices into the upper half of the day’s range. A session close in this zone could form a bullish hammer candlestick, hinting at a possible shift in momentum. However, the aggressive selling pressure suggests additional probes of the nearby support zone from $2.98 to $2.95 before any sustained advance. This area, marked by confluence factors, becomes even more critical as the decline deepens.
Channel and Fibonacci Insights
The drop brought prices nearer to the lower rising channel line, setting up a logical test of this potential support before the correction concludes. The bearish reversal from the top of the rising channel—triggered by a double top pattern—directly targets this lower boundary. Additionally, the failure of the 61.8% Fibonacci retracement at $3.08 opens the door to the 78.6% level at $2.95, aligning with the support zone’s lower end.
From the recent swing high of $3.59, the current 17.3% decline exceeds the prior 13.3% pullback after September’s high, reflecting heightened selling conviction from the extended channel top. Yet, this extended move also signals that bearish momentum may be nearing exhaustion.
Outlook and Support Confirmation
If prices avoid a daily close below $2.95, the support confluence zone should hold, paving the way for a bullish reversal. Today’s action reinforces the top quarter falling channel line as a viable support area, where the selloff found a temporary floor. The hammer potential adds intrigue, but confirmation will come from today’s close – watch for a hold above $2.95 to signal buyers regaining footing, or a breach to extend the correction.
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