Sol market snapshotIf SOL cannot break above 245, there is a chance of forming a reversal pattern — Head and Shoulders (H&S). The right shoulder should not exceed the head.
Main conditions of the Head and Shoulders pattern:
Three peaks:
Left shoulder — the first local peak formed after the price rises.
Head — a higher peak following the left shoulder.
Right shoulder — a peak approximately at the same level as the left shoulder, formed after the decline from the head.
Neckline:
Connects the lows between the left shoulder and the head, and then between the head and the right shoulder.
The neckline can be horizontal or slightly sloping.
A break below the neckline confirms the pattern and signals a potential price decline.
Volume:
Volume is often high at the left shoulder, may be higher or lower at the head, and usually decreases at the right shoulder.
Declining volume during the formation of the right shoulder strengthens the bearish reversal signal.
Movement after the breakout:
After breaking the neckline, the price is expected to fall approximately the same distance as from the neckline to the head’s peak.
