Market Downside Analysis (Bearish Scenario)
If the market shows signs of a downward movement, it is usually triggered by the following technical factors:
1. Rejection at Key Resistance
When the price reaches a high point (Resistance Level) and fails to break above it after multiple attempts, it indicates that the buying momentum is fading and sellers are taking control.
2. Bearish Reversal Patterns
Look for specific candlestick formations on the chart that signal a drop:
Bearish Engulfing: A large red candle that completely "swallows" the previous green candle.
Shooting Star: A candle with a long upper wick and a small body at the bottom, showing that high prices were rejected.
Double Top: A "M" shaped pattern suggesting the trend is about to flip from bullish to bearish.
3. Momentum Indicators (RSI & MACD)
Overbought RSI: If the RSI (Relative Strength Index) is above 70, the asset is considered overbought, and a price correction or "cool down" is likely.
MACD Crossover: If the MACD line crosses below the Signal line, it confirms a shift in momentum toward the downside.
4. Moving Average Breakdown
A strong sell signal occurs when the price breaks and closes below major moving averages, such as the 50-day or 200-day EMA. If a short-term average crosses below a long-term average (known as a Death Cross), it indicates a long-term bearish trend.
Trading Tip: Always wait for a "Confirmation Candle" before entering a sell trade. Never trade based on emotion; stick to your technical levels and use a Stop Loss.$SOL
