Brief Price Action Recap:
On the week of June 14th, 2021, Solana began trading on the crypto exchange at the price of $40.50. By the week of November 1st, 2021, Solano hit an all time high of $260. Ever since that high, Solano has been on a down trend, trending inside a massive falling wedge on the higher timeframes.
On the week of December 26th, 2022, Solana hit an all time low of $8.00. This low signaled a bounce from a smaller falling wedge/bull flag support area found on the smaller timeframes. Note this move has also occurred at the resistance of the larger falling wedge that started after reaching its all time high.
Trade Idea:
Currently, I am watching the price action within the smaller wedge to confirm the breakout of the larger wedge. I expect that Solana could possibly make a retrace/retest move back up to the previous support turned resistance zones of ($20.09 - $26.61) and ($25.73 - $28.50). I am thinking the first resistance zone is tested first in confluence with a 3rd reject of the inside wedge resistance (white dotted line) , followed by a retest of the current resistance level at ($14.30 -$15.13) once it turns support. Once this higher high is completed, we should see a move to the outer smaller wedge resistance to retest or possibly break out to finally retest that resistance area at ($25.73 - $28.50).
In the mean, watch price action on the daily and lower timeframes between the two support and resistance areas between ($10.91 - $11.83) and ($14.30 -$15.13). Although Solana hasn’t broken structure (lower lows and lower highs) is has broken out of an hourly falling wedge, while also reclaiming the support area between $10.91 - $11.83). Watch for a retest of this area over the next few days or weeks. This retest should be in confluence with at least the 50% fib at $11.12 and the resistance of the hourly falling wedge turned support. I would long here as an early entry if price action (structure, chart patterns, candlestick patterns, etc) confirms the retest/bounce at these areas.
For a safer entry, I would wait for an overall change of structure after a successful break and retest of the resistance area at $14.30 -$15.13) as a the beginning of overall trend change but an even safer entry is to wait for the reclaim and hold of resistance between($20.09 - $26.61). Please note that these price action projections are still within the smaller inside wedge on the higher time frames. Overall, you want a major structural change in the daily/weekly timeframes with a convincing breakout of the smaller outer wedge on the higher timeframes, showing the price on the higher timeframes are officially creating higher highs and higher lows. Until then, Solano is still in a down trend overall so trade the levels and patterns accordingly.
If decide to go long earlier and hold throughout these moves, place a protective stop below $8.00. Also, be sure to use other confluences factors such MAs and other indicators for added confirmation. Lastly, if you are targeting the high of the smaller wedge on the higher timeframes at ($44.81 - $48.62) please take profits at each key level/ resistance to manage trade because that large of a target may not play out until end of 2023 or beginning of 2024. It could happen sooner, later, or never so once again trade accordingly.
On the week of June 14th, 2021, Solana began trading on the crypto exchange at the price of $40.50. By the week of November 1st, 2021, Solano hit an all time high of $260. Ever since that high, Solano has been on a down trend, trending inside a massive falling wedge on the higher timeframes.
On the week of December 26th, 2022, Solana hit an all time low of $8.00. This low signaled a bounce from a smaller falling wedge/bull flag support area found on the smaller timeframes. Note this move has also occurred at the resistance of the larger falling wedge that started after reaching its all time high.
Trade Idea:
Currently, I am watching the price action within the smaller wedge to confirm the breakout of the larger wedge. I expect that Solana could possibly make a retrace/retest move back up to the previous support turned resistance zones of ($20.09 - $26.61) and ($25.73 - $28.50). I am thinking the first resistance zone is tested first in confluence with a 3rd reject of the inside wedge resistance (white dotted line) , followed by a retest of the current resistance level at ($14.30 -$15.13) once it turns support. Once this higher high is completed, we should see a move to the outer smaller wedge resistance to retest or possibly break out to finally retest that resistance area at ($25.73 - $28.50).
In the mean, watch price action on the daily and lower timeframes between the two support and resistance areas between ($10.91 - $11.83) and ($14.30 -$15.13). Although Solana hasn’t broken structure (lower lows and lower highs) is has broken out of an hourly falling wedge, while also reclaiming the support area between $10.91 - $11.83). Watch for a retest of this area over the next few days or weeks. This retest should be in confluence with at least the 50% fib at $11.12 and the resistance of the hourly falling wedge turned support. I would long here as an early entry if price action (structure, chart patterns, candlestick patterns, etc) confirms the retest/bounce at these areas.
For a safer entry, I would wait for an overall change of structure after a successful break and retest of the resistance area at $14.30 -$15.13) as a the beginning of overall trend change but an even safer entry is to wait for the reclaim and hold of resistance between($20.09 - $26.61). Please note that these price action projections are still within the smaller inside wedge on the higher time frames. Overall, you want a major structural change in the daily/weekly timeframes with a convincing breakout of the smaller outer wedge on the higher timeframes, showing the price on the higher timeframes are officially creating higher highs and higher lows. Until then, Solano is still in a down trend overall so trade the levels and patterns accordingly.
If decide to go long earlier and hold throughout these moves, place a protective stop below $8.00. Also, be sure to use other confluences factors such MAs and other indicators for added confirmation. Lastly, if you are targeting the high of the smaller wedge on the higher timeframes at ($44.81 - $48.62) please take profits at each key level/ resistance to manage trade because that large of a target may not play out until end of 2023 or beginning of 2024. It could happen sooner, later, or never so once again trade accordingly.
Dennis Butler Jr.