The Daily/4H trends are resetting from an extended downtrend, with the daily Relative Strength Index (RSI) indicating a deeply oversold condition which suggests seller exhaustion is imminent. This presents a prime opportunity for a significant mean reversion rally as the downward momentum is statistically unsustainable.
The trigger for a long entry is the initial bounce off the recent lows, coupled with the daily RSI beginning to curve upwards from oversold territory. On the lower timeframes, we anticipate the 1H RSI to decisively cross above the 50 midline, which will serve as confirmation that short-term momentum has shifted into bullish control. A reclaim of the 1H EMA(7) and EMA(25) would further validate this shift, providing a solid foundation for an upward move.
Entering now is a high-probability play based on the principle of mean reversion. The price is extremely extended below the daily EMAs, particularly the EMA(25), creating a rubber-band effect that is likely to snap back towards the average price. The oversold RSI reading signals that the selling pressure has climaxed, making the asset attractive for buyers looking to enter at a potential bottom. We are positioning for a strong relief rally fueled by short-covering and the influx of new long positions.
Actionable Setup Now (LONG)
Entry: market at 23.88
TP1: 29.20
TP2: 30.85
TP3: 35.40
SL: 21.95
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