The total evaluation for the SOL asset is bearish. Please be reminded that the price action displayed is quite similar to the previous updates in my profile ideas, but with considerable amount of differences involved. All fundamentals behind the market structure shown below are explained in the BTC and ETH chart. Thank you. Here are the analyses for the decisions, structure and trend below:
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Pattern Analysis
The asset itself has been developing a higher-high rejection from a very obvious point of past support now-turned resistance 40-42$ level and a breakdown to the 31-33$ is very likely to be expected. A right shoulder is also possible to show a re-test of that high just to confirm the failure to sustain any bullish bias sending the price to the original support down to 25-27$. There is a slight resemblance of a descending triangle, but the most likely pattern to associate the current market structure with is the Head and Shoulders Pattern. The HnS is normally a bearish pattern that is further amplified with negative fundamentals and low volume. An invalidation point of such pattern is when the current downturn towards 31-33$ has served as support for another leg up potentially breaking 40-42$, however it has to be supported with proper volume and fundamentals or else it would just be deemed as a manipulation wick for market makers to grab liquidity from stop losses and overleveraged shorts.
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Wave Analysis
The price flow of the structure projected is NOT RANDOM but is mimicked similarly to past previous references of such market structure behavior especially after a significant downturn. When the HnS is confirmed, the support around 25-27$ would most likely NOT be broken down very easily and just like our re-tests above, the support will now be continuously re-tested multiple times until a further breakdown is established. The reasoning for such higher edge of a breakdown is the negative fundamentals in smart money markets and as well as other crypto related issues (exchanges withholding funds, etc.)
When we meet the support again, we will have a very tight consolidation from 25$ to 33$ until we break down. The 200 Day MA will possibly intertwine with the shorter moving averages at its tightest range and this is a potential manipulation ground for market makers to squeeze in either direction. A personal tip is to wait for confirmation on the breakdown or breakup before re-entering positions even IF the MAs fully crossed together.
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Trade Analysis
The initial short trade is shown to have a potential of up to 1:3 Risk Reward Ratio with the stop loss being the highest point of the HnS pattern which is exactly 43$. There will be 2 open short positions which 1 will be used to take profit as early as dropping to the 31-33$ region and another position that will be held until it drops to 25-27$. If in any case that the 31-33$ level has acted as a consistent demand level, you will not close your 2nd short position until it hits the original price you shorted from at break-even (no loss except for fees). You will re-evaluate your options then before entering the same short position again with the same target being 25-27$.
The second set of short positions is shown to have a 1:2 Risk Reward Ratio with 43$ being the stop loss area and the first take profit level will be around the 25-27$ region with the latter being around 15-20$. The reason behind ignoring the take profit level at 31-33$ level is that will already have served as resistance. As I mentioned before, a consolidation pattern will happen at the bottom of the range before a further breakdown. It is carefully advised to not revenge trade at any cost nor do you overleverage beyond what you think you cannot afford to lose, the key to leverage is to prepare yourself mentally and emotionally on what you think you can tolerate to lose WITH RESPECT to your profit and loss calculations, liquidations, time tolerance and fundamentals.
If you liked the chart above and the analyses provided here, do not forget to like, follow and share this idea to your friends!
-Wamses
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Pattern Analysis
The asset itself has been developing a higher-high rejection from a very obvious point of past support now-turned resistance 40-42$ level and a breakdown to the 31-33$ is very likely to be expected. A right shoulder is also possible to show a re-test of that high just to confirm the failure to sustain any bullish bias sending the price to the original support down to 25-27$. There is a slight resemblance of a descending triangle, but the most likely pattern to associate the current market structure with is the Head and Shoulders Pattern. The HnS is normally a bearish pattern that is further amplified with negative fundamentals and low volume. An invalidation point of such pattern is when the current downturn towards 31-33$ has served as support for another leg up potentially breaking 40-42$, however it has to be supported with proper volume and fundamentals or else it would just be deemed as a manipulation wick for market makers to grab liquidity from stop losses and overleveraged shorts.
------------------
Wave Analysis
The price flow of the structure projected is NOT RANDOM but is mimicked similarly to past previous references of such market structure behavior especially after a significant downturn. When the HnS is confirmed, the support around 25-27$ would most likely NOT be broken down very easily and just like our re-tests above, the support will now be continuously re-tested multiple times until a further breakdown is established. The reasoning for such higher edge of a breakdown is the negative fundamentals in smart money markets and as well as other crypto related issues (exchanges withholding funds, etc.)
When we meet the support again, we will have a very tight consolidation from 25$ to 33$ until we break down. The 200 Day MA will possibly intertwine with the shorter moving averages at its tightest range and this is a potential manipulation ground for market makers to squeeze in either direction. A personal tip is to wait for confirmation on the breakdown or breakup before re-entering positions even IF the MAs fully crossed together.
------------------
Trade Analysis
The initial short trade is shown to have a potential of up to 1:3 Risk Reward Ratio with the stop loss being the highest point of the HnS pattern which is exactly 43$. There will be 2 open short positions which 1 will be used to take profit as early as dropping to the 31-33$ region and another position that will be held until it drops to 25-27$. If in any case that the 31-33$ level has acted as a consistent demand level, you will not close your 2nd short position until it hits the original price you shorted from at break-even (no loss except for fees). You will re-evaluate your options then before entering the same short position again with the same target being 25-27$.
The second set of short positions is shown to have a 1:2 Risk Reward Ratio with 43$ being the stop loss area and the first take profit level will be around the 25-27$ region with the latter being around 15-20$. The reason behind ignoring the take profit level at 31-33$ level is that will already have served as resistance. As I mentioned before, a consolidation pattern will happen at the bottom of the range before a further breakdown. It is carefully advised to not revenge trade at any cost nor do you overleverage beyond what you think you cannot afford to lose, the key to leverage is to prepare yourself mentally and emotionally on what you think you can tolerate to lose WITH RESPECT to your profit and loss calculations, liquidations, time tolerance and fundamentals.
If you liked the chart above and the analyses provided here, do not forget to like, follow and share this idea to your friends!
-Wamses