Solana (SOLUSDT) is exhibiting several bearish signals suggesting a potential short setup. With Bitcoin (BTC) rejecting the $55,000 - $56,000 resistance area as anticipated, Solana appears to be following suit. Here's a comprehensive analysis of why SOL might be primed for a downward move.
Technical Analysis:
Reversal at Previous Resistance & High Volume Node (HVN):
Price Rejection: SOL is reversing at a significant previous resistance level, which aligns with a High Volume Node—a price area with substantial trading activity, often acting as strong resistance.
Price Below VWAP & Key EMAs:
-VWAP Crossover: On the 1-hour chart, SOL has crossed below the Volume Weighted Average -Price (VWAP), indicating a shift toward bearish sentiment.
-EMAs Breakdown: The price is trading below the 13 and 21 Exponential Moving Averages -(EMAs), reinforcing the downward momentum.
-Correlation with Bitcoin & Market Sentiment:
BTC Influence: Bitcoin's rejection of the key resistance area adds bearish pressure across the crypto market.
Market Downtrend: The overall market sentiment is negative, which could accelerate SOL's potential decline.
Multiple Confluence Points:
High Probability Setup: The combination of these technical factors increases the probability of a successful short trade.
Trade Setup:
🔸 Entry Point: Consider entering a short position around the current price level near the HVN resistance zone.
🔸 Stop Loss: Place a stop loss above the recent swing high to mitigate risk in case of a bullish reversal.
🔸 Take Profit Targets:
First Target: Near the next key support level or recent low.
Second Target: At significant Fibonacci retracement levels or long-term support zones.
Risk Management & Considerations:
Conclusion:
With multiple indicators aligning—a rejection at a key resistance level, crossing below VWAP and EMAs, and a bearish market sentiment—Solana presents a compelling short opportunity. Trading is about managing probabilities, and this setup offers multiple points of confluence that could increase the chances of a successful trade.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.