Core Dynamics: As warned in previous analysis, the 4-hour chart has effectively broken below the key support of $3170. This is an important technical breakdown signal, indicating that the short-term balance between bulls and bears has been disrupted, with bearish forces taking the lead.
Candlestick Chart Technique: Market language after the breakdown
The candlestick pattern when the price breaks below the key support reveals a shift in market sentiment:
Breakdown Candlestick: Accompanying the drop below 3170, there is usually a long-bodied bearish candlestick, and trading volume significantly increases, confirming the effectiveness of the decline and the determination of bears.
Rebound Confirmation: After the breakdown, any rebound towards the 3170-3180 area (which has turned from support to resistance), if accompanied by a long upper shadow and a small body in a 'bearish engulfing' or 'shooting star' pattern, serves as a signal confirming the effectiveness of the resistance and the continuation of the bearish trend.
Downward continuation: After a rapid decline, if a brief horizontal consolidation occurs (possibly forming a small 'flag' or 'triangle'), accompanied by shrinking trading volume, this is often not a bottom, but a continuation station in the downward trend.
Wave theory derivation: Two main paths
After breaking key support, the original corrective wave structure may extend or change. Currently, there are two main scenarios:
Path 1 (preferred): The downward impulse wave is starting.
The break below 3170 can be viewed as the starting point of a new downward impulse wave (the 3rd wave or C wave of a certain degree). Its theoretical target can look toward more important support zones below, such as the $3050-3080 area. If subsequent rebounds (the 4th wave) encounter resistance again near 3170, this path will be further strengthened.
Path 2 (second choice): Complex corrective wave continues.
If the decline receives strong buying support and quickly rebounds at $3100 (psychological level) or in the $3050-3080 area, it may still be in a more complex corrective wave structure (e.g., double three waves). In this case, the price will need more time to oscillate and build a bottom within the $3050-3200 large range.
⚔️ Key operation reference
Core resistance: $3170-3200, which will turn into strong resistance after breaking and serves as a barometer to observe the strength of rebounds.
Support below:
First support: $3100 (psychological level).
Core support: The $3050-3080 area represents the last line of defense that bulls must protect.
Strategic thinking: Before price effectively recovers to 3170, the overall strategy should focus on shorting during rebounds. Patiently wait for the price to rebound to resistance areas and show bearish candlestick signals, which is a choice with a relatively high risk-reward ratio. Bottom fishing must be done with extreme caution; wait for clear bottom reversal signals at stronger support levels.
Risk warning: The above analysis is based on technical charts and is for market discussion only, not constituting any investment advice. The risks of trading cryptocurrency contracts are extremely high; please make independent decisions and manage your positions and stop-losses strictly.
I hope this timely analysis provides you with clear trading references. The current market key level has been broken, and it is a time to test discipline and patience!
