This is my 4th idea looking at Solana with Ethereum as a pattern, benchmark, or comparison. I used this pattern to identify downside targets and potential reversals and now I am using it to call a local high. This is basic and fundamental charting.
Both charts show a 5 impulse Elliot Wave to the upside. With such a clear pattern and impulsive move we don’t see a continuation pattern yet. We Solana does not show an ascending triangle, a cup and handle, or even a symmetrical triangle. Without a continuation pattern we must suspect price will stall at a previous support. Seeing where price flipping support to resistance and vise versa at key levels is one of the basics that can take years to master.
That previous support is the bear trap that was created at the beginning of the bear market. We can see on the right where it played out with Ethereum and I strongly suspect we are seeing the initial stages of that reversal in Solana.
Of course, there are some key differences in the two charts. We can see that when we look at other indicators. I don’t want this idea to become unmanageable so I will just look at one of the basics, the Monthly Bollinger Band. It is pretty clear that looking at the Bollinger Band it looks like Solana did a much better job than Ethereum. Solana has pushed its head above the monthly Bollinger band to reach the previous bull trap whereas Ethereum didn’t even reach the baseline. But either way, price being out of the monthly Bollinger band or near the middle with weekly bearish divergence at previous support still suggests reversal.
I do hope to see the lower limit of the monthly BB to snug up and flatten off to indicate a local low is in when I see Solana double bottom.
Solana Against Bitcoin, Ethereum and BNB Solana also looks like it is in a dreadful position against Bitcoin. The zone of resistance is drawn, in part, due to the MACD oscillaton below zero and the amount of sideways action we needed to have that happen.
The bearish similarities with Solana and trading pairs continues with Ethereum.
BNB has a bit of a different set up. It does not have a clear bull trap like SOL has against BTC and ETH. Rather it had a descending triangle top and a return move to the support of the triangle. Price has returned to the base of the descending triangle and I think with the indicators so overbought we would assume another pull back.
Conclusion and my plan Solana looks like it has hit a local high against USD, BTC, BNB and ETH. There are so many temptations to get out of Solana into a different larger, less volatile token that I don’t see most day or swing traders holding onto Solan for long. Especially margin traders. Timing the shortside can be a wee bit tricky but it can be done. I am staying away from that.
I suspect that Solana will be setting a higher low W pattern. If it does, I will basically be rotating everything I can into it as I expect it will be making a higher high. AS the main chart shows that higher high would be about 100x from the low. If it sets an equal low, then I will suspect it will roughly return to an all-time high. That would be about 25X. That is decent enough for crypto but in all honesty if Solana sets a lower low, I will be looking for a different token to rotate into. Right now, my biggest crypto bag continues to be Fantom as I really like the Big W pattern it is in.
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I still think this will be a W pattern. This is a unique chart. The fibs are on the standard scale but the chart is on the log scale. The retracement hit the 0.786 level and now I think it will zig zag down. I am looking to buy around $15 and below.
Hi, I just want to say thank you for the valuable analysis you are sharing with us. This is a treat for whoever loves technical analysis. I am more than aligned with your view and wait patiently for the right time to enter before taking off.
This_Guhy
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@adnanchehata, thanks. I always find it funny when my longest term ideas with the best upside if played out get the least traction. I am glad you found it useful.
adnanchehata
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@This_Guhy, Only 1% of active traders make more than bank fixed deposits over 3 years. That must be the number of people interested in long-term ideas on trading-view. It takes years of trading and hard hits to appreciate such analysis. It took me years to understand that patience is key in this business. Patience always rewards ;-)
Michael_crypto_trading
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I don't think like you, the 2020 bearish pattern of ETH was manipulated by exceptional news that has only occurred in 2020, so that would be a noise zone should not be taken into account.
This_Guhy
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@Michael_crypto_trading, I just try to think chart patterns and not to trust the news. The mainstream news broadly speaking has always been manipulated by deep pocketed interests. Prices rally into resistance and then sell off into support. Simple as. Lots of rallies that set lower highs die within a previous downtrend bull's trap. When it comes to that concept my original idea was wrong but I was wrong that thought it would die in the 2nd bull trap and not the smaller 1st bull trap
I don't care if the pull back is due to COVID, War in Ukraine, Gaza/Israel/Iran. Price ran into macro resistance and I suspect it will correct into macro support.
CCnerd
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Can you do a XRP analysis please?
This_Guhy
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@CCnerd, I have one. Its in a triangle and boring until it breaks up or down. The XRPBTC chart didn't break out like I thougth but it appears to be a potential W bottom forming. You would trade that like this: thepatternsite.com/bigw.html