SOL Chart Update: Weekly Resistance Signals Weakness
2025-01-30
Category: None

This chart highlights a key observation: SOL has spent multiple days testing the $260 resistance level without successfully breaking above it.
This prolonged stagnation at a critical resistance level is typically a bearish signal, as it suggests an exhaustion of buying momentum. Plus, we are trading below Nov high.

Key Points:

Repeated Resistance Rejections:
The price failed to break out decisively after multiple attempts at the $260 level. The lack of follow-through at this level indicates waning bullish strength, increasing the likelihood of a reversal.

Volume Analysis:
The declining volume near resistance supports the thesis that buyers are losing interest, and sellers are gaining control.
And a lack of significant buying pressure during key resistance tests often precedes pullbacks.

Stochastic Oscillator:
The Stochastic (14,3,3) has turned down from overbought levels, further signaling the potential for downward movement.
This aligns with a bearish divergence on the weekly timeframe, indicating weakening bullish momentum. In order to entry a long position, I am looking for a bullish cross below the 20 level on the Daily timeframe (confluence with a possible retest of the 200 EMA).

Current Strategy
Based on last week's signal (), I initiated a short position around $260, targeting a move into the previously identified purple demand zone at $180–$200.

Confluence Factors:
The demand zone aligns with the 200 EMA on the daily and key Fibonacci levels (0.5–0.618), making it a strong candidate for support.
If we get a clean bounce from this zone, I’ll reassess for potential longs.

Final Note:
SOL’s inability to clear resistance for weeks, combined with weakening volume and momentum, suggests caution. While the long-term structure still leans bullish, the immediate setup favors a short-term pullback into support.

I’ll be monitoring price action closely—whether it’s for a continuation lower or signs of renewed strength ( if we get here, I will cover the higher high scenario—what I will be looking for in terms of price action to establish the continuation, or if it is a divergence).

Until then, patience and well-defined risk management are the name of the game.

 *I think it's very important to read this post too  because I explain the HTF environment and the motivation behind todays idea*