SOL has received bullish winds in its sails after finding the local bottom few days ago - it gained 6% in the last 24h only, totalling a 16% increase in 3 days.
On the 8h chart, it looks like it's repeating the rising wedge pattern that broke bearish after the CPI results were released last Tuesday. This kind of pattern is more likely to break bearish than bullish (4 out of 5 times on average).
As with the previous pattern, it is now being rejected by the .5 Fib retracement - also known as the bear hammer, for obvious reasons. This price area is also confluent with the 100% trend-based Fib extension level marked from the low to the first high, and with an area of previous support that is now turned into resistance (look left for clues).
The 8h 200 EMA shows that SOL is in bearish acceleration - consequent interactions with this EMA resulted in the price going less higher each time. To keep the analysis valid we should see the Pivot point appear before price touches this EMA.
I believe it still has one more move up before breaking down - either to make a double top or by tapping into the Golden Pocket at .618 to .65 Fib (to convince the traders that bought later to mark their profits). The second scenario is more risky as it could mark a breakout, so patience is key before entering the trade - letting the price slide back inside the downtrend area to confirm the fake brakeout is essential.
Two things that bother me though.
First - the RSI is not showing yet signs of bearishness. At the same time it didn't show bearishness with the first wedge either.
Second - the market gap between .65 and .786 Fib lines which asks to be filled and usually gets filled.
As I'm bearish biased with the current markets, I'm cautiously watching this and looking to scale in a short.
💎 Looking forward for your questions below. If this idea provided you value, follow for more.
On the 8h chart, it looks like it's repeating the rising wedge pattern that broke bearish after the CPI results were released last Tuesday. This kind of pattern is more likely to break bearish than bullish (4 out of 5 times on average).
As with the previous pattern, it is now being rejected by the .5 Fib retracement - also known as the bear hammer, for obvious reasons. This price area is also confluent with the 100% trend-based Fib extension level marked from the low to the first high, and with an area of previous support that is now turned into resistance (look left for clues).
The 8h 200 EMA shows that SOL is in bearish acceleration - consequent interactions with this EMA resulted in the price going less higher each time. To keep the analysis valid we should see the Pivot point appear before price touches this EMA.
I believe it still has one more move up before breaking down - either to make a double top or by tapping into the Golden Pocket at .618 to .65 Fib (to convince the traders that bought later to mark their profits). The second scenario is more risky as it could mark a breakout, so patience is key before entering the trade - letting the price slide back inside the downtrend area to confirm the fake brakeout is essential.
Two things that bother me though.
First - the RSI is not showing yet signs of bearishness. At the same time it didn't show bearishness with the first wedge either.
Second - the market gap between .65 and .786 Fib lines which asks to be filled and usually gets filled.
As I'm bearish biased with the current markets, I'm cautiously watching this and looking to scale in a short.
💎 Looking forward for your questions below. If this idea provided you value, follow for more.
