CANNABIS BASKET * TC FIB WEEKLY ANALYSIS
1. Long-Term Downward Channel: The price has been contained within a long-term descending channel, and it remains below the upper boundary of this primary channel. The fact that the price has stayed within this structure suggests that the broader downtrend may still be intact unless there is a strong breakout above this channel’s upper resistance line.
2. Support and Resistance Zones: The price is currently testing resistance near the $1,600 range. There are multiple Fibonacci levels, such as the 0.382 and 0.5 retracement levels, aligning closely within this range, suggesting a significant resistance zone. If it can decisively break above these levels, it could target higher resistance levels at around $2,571.11 (0.5 level) and $3,091.33 (0.618 level).
3. Short-Term Ascending Channel: Within the larger downtrend, a new ascending channel has emerged, indicating a bullish trend on a smaller time frame. This suggests that, in the short term, the price has shown strength, though it is approaching the upper boundary of this smaller channel as well.
4. Fibonacci Cluster Zones: Fibonacci retracement levels form clusters in certain areas, particularly between $1,500 and $1,800 and again around $2,500. These clusters tend to create zones of strong support or resistance and could influence the price movement in these regions.
5. RSI Bearish Divergence: The updated RSI (Relative Strength Index) shows a bearish divergence, indicating that, while the price has been rising, the momentum behind these moves is weakening. This could be an early warning signal that a correction or pullback may be approaching if it fails to clear its immediate resistance zones.
6. Potential Pullback Levels: Should the price fail to break higher, it may retrace to support levels such as $1,380, or even back toward the recent lows around $1,016.57 and below if bearish sentiment strengthens.
Summary:
The chart suggests that the cannabis index is at a pivotal point. It’s testing major resistance levels within both long-term and short-term trend structures, and the bearish RSI divergence suggests that momentum may be weakening. A breakout above the $1,800-$2,000 range with sustained volume could validate a bullish reversal. However, failure to break higher might lead to a correction towards lower support levels.
2. Support and Resistance Zones: The price is currently testing resistance near the $1,600 range. There are multiple Fibonacci levels, such as the 0.382 and 0.5 retracement levels, aligning closely within this range, suggesting a significant resistance zone. If it can decisively break above these levels, it could target higher resistance levels at around $2,571.11 (0.5 level) and $3,091.33 (0.618 level).
3. Short-Term Ascending Channel: Within the larger downtrend, a new ascending channel has emerged, indicating a bullish trend on a smaller time frame. This suggests that, in the short term, the price has shown strength, though it is approaching the upper boundary of this smaller channel as well.
4. Fibonacci Cluster Zones: Fibonacci retracement levels form clusters in certain areas, particularly between $1,500 and $1,800 and again around $2,500. These clusters tend to create zones of strong support or resistance and could influence the price movement in these regions.
5. RSI Bearish Divergence: The updated RSI (Relative Strength Index) shows a bearish divergence, indicating that, while the price has been rising, the momentum behind these moves is weakening. This could be an early warning signal that a correction or pullback may be approaching if it fails to clear its immediate resistance zones.
6. Potential Pullback Levels: Should the price fail to break higher, it may retrace to support levels such as $1,380, or even back toward the recent lows around $1,016.57 and below if bearish sentiment strengthens.
Summary:
The chart suggests that the cannabis index is at a pivotal point. It’s testing major resistance levels within both long-term and short-term trend structures, and the bearish RSI divergence suggests that momentum may be weakening. A breakout above the $1,800-$2,000 range with sustained volume could validate a bullish reversal. However, failure to break higher might lead to a correction towards lower support levels.
In technical analysis, several methods focus on higher timeframes to provide a broader, more reliable context for trading or investment decisions. Elliott Wave Principle generally considers historical higher timeframes as mandatory.
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