On the EGLD/USDT (1D timeframe) chart, we can clearly see a strong downtrend structure dominating for the past few months. Price continues to form lower highs and lower lows, indicating persistent selling pressure.
Currently, price is testing a key area: a strong demand zone (3.95 ā 3.65) highlighted by the yellow box. This zone has acted multiple times as a support level preventing further downside.
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š Pattern Formation: Descending Triangle
The current structure forms a Descending Triangle, characterized by:
Lower highs (descending trendline) ā increasing selling pressure
Strong horizontal support at 3.95 ā 3.65 ā buyers defending this zone
Decreasing volume ā potential for a significant breakout
š This pattern is typically a bearish continuation pattern, but confirmation is still required.
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š¢ Bullish Scenario
Main trigger:
A valid breakout above the descending trendline
Daily candle close above the 4.10 ā 4.30 area
Potential targets:
4.90 (previous minor resistance)
5.50 (next supply zone)
Additional confirmation:
Increasing volume on breakout
Successful retest of the trendline as support
š If this scenario plays out, it could signal an early trend reversal or a relief rally
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š“ Bearish Scenario
Main trigger:
Strong breakdown below 3.65 (key support zone)
Daily candle close below that level
Potential targets:
3.20 ā 3.00 (next support zone)
Possible continuation toward the psychological level at 2.80
Additional confirmation:
Increasing volume on breakdown
Failure to reclaim the 3.65 level
š This would confirm a bearish continuation of the descending triangle pattern
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ā ļø Key Takeaways
The 3.95 ā 3.65 zone is the decision area
Price is currently in a compression phase
A breakout or breakdown from this range could trigger the next major move
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