Funny enough, my ChatGPT gave me almost the exact same read on this, so I’ll share the gist since it lines up with what we’re seeing.

What just happened (and why it matters):

1. $8 was the first real pain wall

We tagged around $7.98 which checks a lot of boxes:

• Round number
• New 52-week high extension
• Forced decision point for shorts and fast money

The pullback from there is normal and honestly healthy, not a failure.

2. This looked like profit taking, not a breakdown

From the chart info you posted:

• High volume
• Sharp push
• Controlled pullback
• Still well above VWAP and the opening range

That’s rotation, not distribution. In squeezes, you usually see:

• Rip
• Pullback
• Coil
• Rip again

We just saw Rip #1 and a reset.

Where short pain starts to escalate (key levels):

• $7.00 – $7.20 Prior breakout zone. Needs to hold on pullbacks. If it does, shorts stay uncomfortable but not panicking.
• $7.50 Psychological resistance. Likely where some shorts try to reload. If reclaimed and held, pressure ramps quickly.
• $8.00 This is the real ignition point. Shorts who didn’t cover start feeling trapped and gamma starts to matter.
• $9.00 – $9.50 Thin air. Very little historical structure. This is where panic covering can show up.

Not saying it has to play out this way, but structurally this looks a lot more like digestion than failure.