The guillotine finally arrived!
Yesterday was another day of blood and violence, with the total liquidation amount reaching 393 million dollars in 24 hours, wiping out over 2.8 billion RMB. The cruelty of the currency circle lies in the inability to accurately predict when major fluctuations will occur. Once the fluctuation exceeds the limit of tolerance, it will trigger a massive transfer of wealth. Once again, I repeat, respect the market and stay away from high leverage!
In previous articles, it has been mentioned multiple times that the current market has reached the end of a wave, entering the "fish tail" market. Although the fish tail is delicious, it is full of bones. It also warns against the FOMO emotion and emphasizes the need to be mentally prepared for the guillotine. Just last Saturday, the community specifically reminded everyone to reduce their positions in preparation for a sharp market decline, and it has now been confirmed.
Returning to the current market situation, the large bearish candlestick from yesterday indicates the appearance of a strong daily top formation, which most likely means a pullback on the daily chart corresponding to a downward movement on the 4-hour chart. The correction trend has just begun, so it is too early to consider bottom fishing. It's better to wait until the decline has bottomed out before considering replenishing positions.
From the daily chart, a three-stage divergence has appeared after leaving the internal segment, indicating a high probability of a pullback. It is still difficult to determine where this pullback will lead.
Looking at the 4-hour chart, the MACD has significantly crossed below the zero axis, indicating strong bearish momentum. It is currently difficult to judge whether there will be a violent washout or a direct reversal. The key is whether the bulls can pull the price back above 43,500. Yesterday's drop has reduced the probability of a continued uptrend on the 4-hour chart, increasing the likelihood of a future downward trend.
Finally, looking at the 30-minute chart, after the three-stage divergence turned into a sell signal, there was a significant volume breakthrough of the central range. The focus now is on whether the subsequent rebound on the 30-minute chart will enter the central range. If it does not, it will be the strongest bearish trend. There will be no opportunity for bottom fishing until a new 30-minute central range appears.
If you are interested in the "Chen Theory" and want to obtain learning materials for free, watch public live broadcasts, participate in offline training camps, improve your trading skills, and build your own trading system to achieve stable profitability, use the "Chen Theory" to timely escape the peak and bottom. You can scan the code to follow the public account, private message for access, and add the WeChat account to join the group for learning!
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