Flutter (FLUT) plummets 6.28% on bearish reversal as technical indicators signal continued downtrend

Flutter (FLUT) closed the most recent session with a 6.28% decline, marking a significant bearish reversal after a prior consolidation phase. The price action reveals a large-bodied bearish candle on January 16, characterized by a wide range of $13.26 (from $187.95 to $201.21) and minimal wick formation, signaling intense selling pressure. Key support levels emerge at the recent low of $187.95, while resistance is clustered around $201.08–$203.70, reflecting prior swing highs. The breakdown below these levels suggests a potential continuation of the downtrend, though a rebound to test the $195.69–$199.85 range may occur before further declines.

Candlestick Theory

The recent bearish reversal candlestick on January 16 forms a "Bearish Engulfing" pattern, confirming a shift in sentiment from bullish to bearish.

The price has since tested the $187.95 support level, which may act as a short-term floor. If this level holds, a "Hammer" or "Inverted Hammer" could emerge on a rebound, indicating potential short-covering or buying interest. Conversely, a break below $187.95 would target the next support at $190.55–$191.79, with a failure to hold that level suggesting a deeper correction toward $183.00–$185.00.

Moving Average Theory

The 50-day, 100-day, and 200-day moving averages are in a bearish alignment, with the 50-day MA (currently around $205.00) below the 100-day ($215.00) and 200-day ($220.00) averages. The price remains below all three, reinforcing a downtrend. A crossover of the 50-day MA below the 100-day MA (death cross) is imminent, which would heighten bearish momentum. A sustained break above the 50-day MA would signal a potential short-term rally but would require strong volume to validate such a move.

MACD & KDJ Indicators

The MACD histogram has turned negative, with the MACD line crossing below the signal line on January 16, confirming bearish momentum. The KDJ (stochastic oscillator) indicates oversold conditions, with %K dipping below 20 and %D following closely. However, a bearish divergence is present: while %K and %D may show a temporary oversold bounce, the price remains in a downward channel. A failure to close above the 50-day MA would invalidate any bullish KDJ signals.

Bollinger Bands

The Bollinger Bands have expanded significantly due to heightened volatility, with the price closing near the lower band on January 16. This suggests a potential mean reversion trade if the price rebounds, but the bands’ expansion indicates continued volatility. A contraction in band width would signal a period of consolidation before a breakout, though the current wide bands suggest the downtrend is still in force.

Volume-Price Relationship
The recent sell-off on January 16 was accompanied by elevated volume (3.84 million shares), validating the bearish reversal. However, volume has since declined on subsequent sessions, suggesting waning selling pressure. A follow-through increase in volume on a rebound would indicate short-covering, while declining volume on further declines could signal capitulation. The confluence of high-volume bearish reversals and low-volume consolidation phases supports a continuation of the downtrend.

Relative Strength Index (RSI)

The RSI has plunged below 30, entering oversold territory, but remains within a bearish divergence context. While oversold conditions may attract short-term buyers, the RSI’s failure to cross back above 30 despite multiple attempts highlights the strength of the downtrend. A sustained close above 40 would be necessary to confirm a reversal, though this is unlikely without a break above the 50-day MA.

Fibonacci Retracement

Key Fibonacci levels from the recent high of $223.97 to the low of $187.95 are positioned at 38.2% ($206.00), 50% ($205.46), and 61.8% ($204.92). The price has already tested the 50%–61.8% levels, which now act as dynamic resistance. A break below the 61.8% level would target the 78.6% retracement at $201.08, aligning with prior support-turned-resistance. A failure to hold these levels would suggest a deeper correction toward the 88.6% level at $199.03.
The confluence of bearish candlestick patterns, moving average alignment, and oversold RSI conditions suggests a high probability of continued downside. However, a rebound to test the 50-day MA could create a short-term opportunity for a countertrend move, particularly if volume increases and KDJ signals an oversold bounce. Divergences between RSI and price action highlight the risk of a prolonged downtrend, while the Bollinger Bands’ expansion underscores ongoing volatility. Investors should monitor the $187.95 support level and the 50-day MA for potential trend continuation or reversal cues.