WTI crude oil is in the throes of a sharp downtrend, as the commodity has been carving out lower highs and lower lows since late March. Price is currently hovering around the $75.50 area after a steep selloff, but a corrective bounce could be in the works before sellers regain control.

A descending trend line connects the recent swing highs, forming a solid ceiling that has capped any meaningful recovery attempts. Should price attempt a pullback, the Fibonacci retracement levels drawn from the swing high near $97.25 to the swing low around $72.75 mark the areas where sellers could be waiting to hop back in.

The 38.2% Fib sits at $82.11, while the 50% level is at $85.00 and the 61.8% retracement lands at $87.89. These levels also converge near the descending trend line, strengthening their significance as potential resistance zones. A corrective bounce to any of these Fibs could attract fresh selling pressure and keep the downtrend intact.

On the subject of moving averages, the 100 SMA has crossed below the 200 SMA to confirm that the path of least resistance is to the downside, and that the selloff is more likely to gain traction from here. Both indicators are also sloping lower and could act as dynamic resistance on any relief rallies.

Stochastic is turning up from near the oversold area, suggesting that a short-term corrective bounce could be in the works. However, the oscillator has plenty of room to climb before reaching the overbought region, meaning the pullback could have some legs before sellers step back in.

RSI is also heading north from lower levels, reinforcing the case for a near-term correction. If either oscillator reaches elevated territory near the Fibonacci resistance zones, a bearish reversal could signal that the slide is ready to resume toward the $72.75 swing low or below.

Crude oil has been in selloff mode following US-Iran diplomatic progress, though issues surrounding the normalization of flows from Hormuz and ongoing negotiations could still bring some upside.