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ZRXBTC Local Top? | Bearsh Divergence | Parabolic Rise

Hello Traders,

Today’s chart will be on ZRX/BTC which may be putting in a local top that is accompanied with a potential bearish divergence. ZRX has risen in a parabolic manner a correction or consolidation is highly probable.

Points to consider,
- Strong bull trend on 4 hr timeframe
- Price tested structural resistance (fake out)
- Local support between .50 and .618 Fibonacci
- Stochastics projected downwards
- RSI respecting downwards resistance
- EMA’s holding price support
- Noticeable increase in volume
- VPVR decreasing in volume of transactions

ZRX has had an impressive run from accumulation zone but now looks very over extended, a consolidation or correction phase is highly probable and we do have some early signs that suggest so.

Price has tested structural resistance; this could be the potential local top due to wicks as sellers are very strong in this area at current given time. Local support is between the .50 and .618 Fibonacci level, this is a good retracement zone if price where to correct from local top.

The stochastics is currently projected downwards, we do have stored momentum in this direction if this bearish divergence where to play out. RSI is currently respecting its downwards resistant line, clearly diverging from price which puts more emphasis on the bearish divergence…

EMA’s is clearly holding price as support, we are still is this parabolic rise until we break the EMA’s decisively as this will negate the market structure.

Volume is currently above average, we do have noticeable increase in bull volume, if price breaks structural resistance, bull volume will then need to sustain to avoid the chances of being a fake out.

The VPVR is quite interesting as it clearly shows a decrease in volume of transactions from current structural resistance and local support. This shows us that price maybe even more probable to retrace to local support due to the lack of resistance being provided by the VPVR.

Overall, IMO, ZRX needs to correct from current levels as this parabolic trend has been over extended, we do have clear signs of a bearish divergence playing out. We may consolidate to cool of indicators or we may correct to local support, putting in a higher low in the trend.

What are your thoughts?

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And remember,

“Trade the market in front of you, not the one you want!” – Scott Redler