Flux (FLUX) – In the process of activating a double-top formationPosted on Tuesday, September 13 2022 at 9:13 pm GMT+0000
Flux (FLUX) reversed sharply lower after failing to overrun the 6th of September intraday top and is now in the process of activating a double-top formation.
A double top is an extremely bearish technical reversal pattern that forms after an asset reaches a high price two consecutive times with a moderate decline between the two highs. It is confirmed once the asset’s price falls below a support level equal to the low between the two prior highs.
In trend indicators, the 20- and 40-period exponential moving averages are looking to complete a bearish crossover, which could sponsor the upcoming negative shift in the short-term picture. Additionally, the MACD has sailed into the negative waters, while the Awesome Oscillator is diving below zero, both reflecting increasing negative risks for the market.
Following a firm breach of the pattern’s neckline at 1.11, Flux will officially open the gate towards the Fibonacci golden number at 0.93, where bears might pause temporarily before reaching the pattern’s target at 0.83, which coincides with the 23rd of August bottom. Another leg lower will instantly reach the 227.2% Fibonacci extension at 0.74.
On the other hand, if buyers make a comeback, initial resistance may arise from the 20- and 40-period exponential moving averages around 1.24, but should the market increase positive momentum above these lines, the 1.39 level marked by the double top will be the next level in focus.
To summarize, negative risks are increasing and Flux is expected to come under massive selling pressure following a dip below 1.11.