SOLUSDT Trade Log
2024-12-08

SOLUSDT Short Setup (4H)   

 Trade Logic:   

-  Entry:  Short within the 4-hour Fair Value Gap (FVG) following a strong sell signal.  

 Confluence Factors:   

  -  Overextension:  Price shows significant overextension above key resistance levels, increasing the probability of a reversal.  

  -  Market Structure Shift (MSS):  Clear break of bullish structure, signaling a potential trend reversal.  

  -  Long Squeeze:  Evidence of trapped long positions, adding downward pressure as they exit.  

  -  Declining CVD (Cumulative Volume Delta):  Weak buyer momentum during the recent price rally, supporting bearish bias.  

-  Risk-Reward:  Minimum 1:2 RRR with stop-loss above the FVG and a maximum risk of 1% of account balance.  

-  Target:  TP1 at the next structural demand zone; TP2 near key psychological support (e.g., $50).  

 Macro Context:   

-  Market Sentiment:  Broader crypto market shows risk-off behavior as BTC retraces, aligning with bearish SOLUSDT bias.  

-  Funding Rates:  Positive funding rates indicate aggressive long positioning, increasing short squeeze potential.  

-  On-Chain Metrics:  Declining SOL staking activity and increased token flow to exchanges suggest reduced demand and potential sell pressure.  

Keep stops tight and reassess if SOL breaks back above the 4H FVG, invalidating the setup.