Oversold Bounce Setup: WIF Coils at 0.31 Support for a 24h Mean Reversion Toward 0.34

Title/Thesis: Oversold into year-end: WIF compresses at 0.31 support with a high-probability mean-reversion bounce toward 0.335–0.34 in the next 24h

1. Market regime and context

• Timeframes used: Daily (primary bias), 4H/1H (timing), intraday prints (VWAP, microstructure).
• Regime: Established daily downtrend since early November (lower highs/lower lows). However, price is now parked at a multi-touch demand shelf (0.305–0.313) into holiday volume compression, increasing mean-reversion odds.
• Volatility: Contracting versus early-December. Daily ATR(14) ≈ 0.028 (est.), implying ±9% 24h expectancy from spot.

2. Price action and structure

• Major swings: Oct peak ~0.80; capitulation Oct 10; relief to ~0.55; renewed decline across Nov with an acceleration Nov 21 to ~0.312; rebound to ~0.44 (Dec 9), then stair-step lower into Dec 25–26.
• Current area: Retesting the Nov 21 capitulation zone (0.312–0.328) and yesterday’s close at 0.3075; today’s session ranged 0.3055–0.3217 with a higher intraday low after 17:00 UTC, hinting intraday stabilization.
• Microstructure (hourly): Fade from 0.3217 early, liquidity sweep to ~0.3098 (17:00), then steady higher lows and persistent bids above 0.313 into the close; VWAP-proximal churn suggests absorption, not trend continuation.

3. Support/Resistance map (confluence graded)

• Support: 0.305–0.313 (A+): multi-day shelf, yesterday’s daily close 0.3075, lower Bollinger band proximity, liquidity cluster at 0.30.
• Next support: 0.295–0.287 (B): projected if 0.30 breaks via stop run (no prints here yet in dataset).
• Resistance: 0.321–0.327 (A-): intraday high, 1H supply; 0.334–0.335 (A): prior daily shelf; 0.341 (A): 23.6% Fib of 0.4498→0.3075; 0.356–0.362 (A): 38.2% Fib/20D SMA; 0.373–0.38 (B+): prior pivots.

4. Moving averages

• Daily 20SMA ≈ 0.362 (est. from last 20 closes). Price 0.313 ≪ 20SMA: bearish trend but stretched; historical tendency to revert toward mid-band/20SMA after band taps.
• Daily 50SMA > 20SMA > price: bearish alignment; however, distance from 20SMA is outsized, enabling countertrend bounce.
• 1H MAs (qualitative): Price reclaimed/hovering near 1H short MAs post 17:00, indicating intraday balance.

5. Momentum oscillators

• Daily RSI(14) ≈ 25 (computed), firmly oversold; sequence shows larger average losses vs gains, but losses decelerated last two sessions (bullish condition for mean reversion).
• Stochastic (qualitative): Sub-20 with potential cross up on 1H/4H after the 17:00 low; supportive of short-term bounce.
• CCI/MFI (inferred): CCI deeply negative and flattening; MFI likely subdued due to holiday volumes; no distribution spike.

6. MACD and trend strength

• Daily MACD: Below zero; histogram contraction the past couple sessions consistent with downside momentum fading at support.
• DMI/ADX: -DI dominant with ADX elevated earlier; recent intraday prints suggest ADX flattening—trend weakening at a key level.

7. Volatility envelopes and bands

• Bollinger Bands (20,2): Mid ~0.362, lower estimated ~0.302. Price hugging lower band through Dec 24–26. Band touch plus oversold RSI elevates bounce odds. Mean-reversion target zone: 0.334–0.341 first.
• Keltner vs Bollinger: Bands likely widened earlier, now compressing intraday—setup for a modest relief move rather than an immediate expansion down.

8. Ichimoku (daily, qualitative)

• Price below Tenkan (~0.372) and Kijun (~0.378), cloud overhead: macro-bearish. However, large Tenkan/Kijun gap indicates stretched condition; Tenkan often acts as magnet post-stretch. Near-term magnet more realistically is 0.334–0.341 given holiday volume.

9. Fibonacci and retracement logic

• Swing: Dec 9 high 0.4498 → Dec 25 low 0.3075.
• 23.6% = 0.3411, 38.2% = 0.3618, 50% = 0.3787.
• First reachable in 24h under current ATR: 0.341 (ceiling of our near-term target band). 38.2% more likely on multi-day horizon.

10. Volume, OBV, VWAP, participation

• Volume has tapered into holidays; selloffs earlier had heavy participation; current floor-building on lighter volume suggests supply exhaustion.
• OBV (qualitative): Flattening across mid-Dec; no new distribution spike accompanying the latest push to 0.305–0.313.
• Intraday VWAP: Current price slightly below likely session VWAP (~0.315–0.316). A reclaim is a standard trigger for mean reversion to prior 1H supply (0.321–0.327) and then daily shelf (0.334–0.335).

11. Pattern diagnostics

• Descending channel/wedge characteristics since Nov: touch near channel lower bound this week; wedge endings often resolve with countertrend bounces before trend decision.
• Wyckoff lens: Nov 21 looked like a Selling Climax (SC) around 0.312; subsequent rallies formed AR, then an ST retest now around 0.307–0.313 into lighter volume—consistent with a secondary test rather than fresh markdown.
• Harmonic flavor: Pullback magnitude versus Dec 9 swing suggests a deep retrace (near 0.86–0.886 of last impulse), which often spawns reactive bounces. Current prints around 0.31 align with that deep-retrace completion.

12. Risk scenarios (next 24 hours)

• Base case (55%): Mean-reversion drift higher to 0.329–0.339 with intraday tests of 0.321–0.327 supply; wicks into 0.341 possible under thin liquidity.
• Range case (30%): Consolidation 0.308–0.327 around VWAP with no decisive break; close near 0.32–0.325.
• Downside tail (15%): Break of 0.305 liquidity pocket triggers stop-run to 0.295–0.287 before responsive buying; would likely be a wick in low-liquidity hours.

13. Execution plan and levels

• Bias: Long for a tactical bounce given confluence: daily RSI ~25 (oversold), near lower Bollinger, retest of multi-touch support, intraday stabilization, and holiday volume compression.
• Optimal entry: Use a patient limit buy slightly below spot to exploit any overnight sweep—0.311–0.312 zone aligns with intraday higher-low base and below-session VWAP.
• Profit target (24h): 0.338–0.341 (fits ATR and Fib 23.6% 0.341). First resistance step 0.321–0.327; partials there prudent in active management, but headline TP at ~0.339.
• Risk reference (stop for planning, not required here): Below 0.303–0.299 (sub-0.30 liquidity sweep). R:R from 0.311→0.339 ≈ 1:3+ with a ~0.008–0.012 stop.

14. What invalidates the bounce

• Hourly acceptance below 0.305 with rising volume and failure to reclaim VWAP quickly—then the play shifts to waiting for 0.295–0.287 reaction before reassessing longs.

15. 24-hour price path projection

• Asia open drift higher toward VWAP reclaim (~0.315–0.316), push into 0.321–0.327, brief pullback, then late-session extension to 0.334–0.339 if liquidity permits. Close likely in 0.326–0.336 band.

Conclusion: Despite the broader bearish trend, the immediate setup favors a tactical long for a 24h mean-reversion bounce from the 0.311–0.313 base toward 0.338–0.341. Probability-weighted outcome supports a Buy with a limit entry below spot and a TP near the 23.6% retracement.