As we examine the JUP/USDT pair on the 4-hour chart, we can observe a compelling setup for a long position. The formation of a falling wedge pattern, typically a bullish reversal signal, suggests a potential upward movement once a breakout occurs. Adding to this bullish perspective is the RSI Divergence Indicator, which displays signs of a bullish divergence; the price is making lower lows while the RSI is making higher lows, indicating weakening bearish momentum.
The strategy here is to enter a long position upon a confirmed breakout above the upper trendline of the falling wedge. A conservative entry would be after a 4-hour candle closes above the wedge, coupled with an increase in trading volume to validate the breakout.
Two profit targets have been set to capitalize on this potential reversal:
TP1: $0.5875, which is just below the recent swing high and acts as a minor resistance level. TP2: $0.6632, which is a stronger resistance level and aligns with previous price interactions. For risk management, a stop loss is recommended below the most recent swing low within the wedge to protect against invalidation of the pattern. This area is also below the lower trendline of the wedge, providing a buffer zone in case of any false breakouts.
Considering the current price action and the bullish indicators, this trade setup offers a favorable risk-reward ratio with clear levels for both taking profits and cutting losses.
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