Consolidate before pumping.. VCP and SMC concept

9월 22일

Using both the Volatility Contraction Pattern (VCP) and Smart Money Concepts (SMC), we can build a clearer perspective on whether to buy TAI in the current market.

1. VCP Concept Consideration:

The VCP pattern shows that the price is tightening and volatility is contracting. The price has been showing lower highs and stabilizing around $0.10. In a typical VCP, you wait for:

A tightening range with lower volatility, which we are observing in the current chart.

A breakout above a key resistance level, which has not yet happened. The breakout level would likely be around $0.15–$0.17, as that's where the previous highs have been formed.


Buying Spot Now Based on VCP:

Pros:

The price is near a strong support zone around $0.10, which could represent the final contraction phase before a breakout.

If you are confident in the breakout potential and willing to take on some risk, buying near this support might give you a favorable entry point before the potential surge.


Cons:

A VCP strategy generally recommends waiting for the breakout with strong volume to confirm the upward move. Since there has been no clear breakout yet, entering now is risky if the price breaks down further.



2. SMC Concept Consideration:

From an SMC perspective, the market structure remains bearish:

The current bearish trend and order blocks around $0.15 suggest a short-term continuation downward if the price doesn’t break the bearish structure.

Liquidity grabs: There’s a possibility of a liquidity sweep below $0.10 before any upward movement. If this happens, you might get a better price than now.

Fair Value Gap (FVG): An imbalance exists between $0.14–$0.15, meaning the price may retrace to fill this gap before moving lower, offering a potential entry for a short-term trade.


Buying Spot Now Based on SMC:

Pros:

SMC suggests that if the $0.10 demand zone holds, this could be a sign of accumulation by institutional players, meaning the price could start to rise from this level.


Cons:

If a liquidity sweep occurs below $0.10, you might be able to enter at a better price, but you risk buying now at the upper range of consolidation.

SMC often suggests waiting for market structure shifts (such as higher highs and break of resistance) before buying, which hasn’t occurred yet.



Summary: Should You Buy Now?

If you are a conservative trader using these concepts, the answer would likely be to wait:

VCP theory suggests waiting for a confirmed breakout above $0.15–$0.17 with strong volume before entering. This breakout will confirm that the price is exiting the accumulation phase and entering an expansion.

SMC theory advises waiting for the market structure shift to bullish, which would be indicated by a break of resistance or a liquidity grab below $0.10, followed by a strong recovery.


If you are a risk-tolerant trader and believe in the long-term potential of TAI, buying at the current $0.10–$0.11 support zone could be a strategic move, with the understanding that:

You might see short-term downside if there is a liquidity grab or continuation of the bearish trend.

Place a stop-loss below the $0.08 level to minimize risks in case the price breaks lower.


Final Recommendation:

Conservative Approach: Wait for a breakout above $0.15 with volume.

Aggressive Approach: Buy at the current support around $0.10 but manage your risk with a tight stop-loss.