On the 4-hour chart of the US100 index, the price, after a considerable downward movement, has managed to recover its structural low and enter a short-term bullish trend. However, this upward momentum continued only until the price reached a strong supply zone (the yellow area on the chart), a region that has previously acted as a major ceiling and repeatedly halted bullish attempts. As the price entered this zone, selling pressure naturally increased, leading to the formation of indecisive candles with long wicks—clear signs of weakening buying power at higher levels.
As the price interacted with the dynamic supply area highlighted in red, it faced multiple rejections and showed signs of exhaustion. in Nasdaq AnalysisThe market’s behavior indicates that buyers have lost the strength to break above this zone. The formation of a Double Top pattern or even a slightly irregular Head & Shoulders structure further reinforces the likelihood of a short-term trend reversal. Such behavior typically occurs when liquidity on the buy-side is absorbed in higher regions, and the market requires a deeper correction before potentially continuing its upward path.
From a liquidity perspective, the price has collected buy-side liquidity above the previous structure (marked as XXX in the chart) and then sharply reacted downward. This is another bearish confirmation, as markets often reverse or enter corrective phases after sweeping liquidity. With the breakdown of the short-term support zone and the closing of candles below the recent multi-day range, the probability of a move toward lower support levels around 25,300 – 25,400 has now increased.
Overall, the current structure of the US100 suggests that the market is in a distribution phase, with sellers gaining greater control. As long as the price fails to break above the yellow supply zone with strong candles and solid volume, the dominant scenario remains a bearish move or a deeper correction. Short-term traders may look for opportunities to follow this downward momentum, while any long positions should wait for a clean breakout above supply and the formation of a renewed bullish structure.
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