Determining whether price momentum is weakening is not actually complicated; the key lies in comparing the performance of the "current upward wave" and the "previous upward wave."
In an upward trend, when momentum truly begins to change, it often does not immediately result in a decline; instead, the price at a similar level "stops moving up," making it difficult to replicate the previous upward magnitude.
When bullish forces are strong, each round of upward attacks typically exhibits several obvious characteristics:
The body part significantly enlarges, and the price continues to push higher;
The close can steadily remain above previous highs;
The vertical distance between the new high and the previous high remains stable, or even gradually expands.
Once bullish forces begin to weaken, these characteristics will show significant changes:
The magnitude of new highs clearly shrinks, with each upward surge having increasingly limited space;
Even if there is a brief breakout above previous highs, it is hard to maintain, and the close cannot effectively stabilize;
The upper shadow lines increase and lengthen, indicating that selling pressure at high levels is significantly intensified, and after a surge, it is quickly suppressed.
These details may seem subtle, but they are extremely valuable for reference: they indicate that, under roughly similar buying pressure, the price has become difficult to replicate the previous gains.
Moreover, as the price approaches important resistance zones, this phenomenon becomes increasingly evident:
The upward space is further compressed;
The risk of pullback significantly increases;
The market's willingness to chase higher naturally declines.
The result is that:
Breakouts are no longer as decisive and smooth as in the early stages of the trend,
The effective distance of upward moves continuously shortens,
And the intervals between new highs gradually narrow.
This does not necessarily mean that the market will reverse immediately, but it is certain that the strength of the current upward trend is not as strong as before. In this case, the probability of continuing to chase higher and the potential risk-reward ratio will clearly decrease.
