The 4-hour chart trend is bearish, with price being rejected near the key supply zone of $2.28, forming a lower high that confirms the dominance of the bearish structure. The current price action is a weak pullback after a downward breakout.
The trigger point for trading is based on the hourly chart perspective: we expect the 1-hour RSI to encounter resistance and be rejected when approaching or testing the 50 level. This rejection will indicate that bullish pullback momentum is waning, and bears are about to regain control of the market. Furthermore, during the pullback, price is likely to be suppressed below the key exponential moving average (EMA), providing further confirmation for shorting.
The logic for establishing a short position here is that we are trading with the trend in an established 4-hour downtrend. The current pullback provides a relatively high risk-reward entry point. By setting the stop loss above the recent minor swing high, we can effectively manage risk while targeting the demand area below.
Executable trading strategy (short)
Entry: Market price 2.1008
Take profit 1: 2.0052
Take profit 2: 1.9097
Stop loss: 2.1645
$XRPUSD$PIEVERSE
$YALA
