SOL H4: Is the Bull Run Over, or Are We Just Getting Started?
2025-01-22
Category: None

Market Structure Overview
The SOL/USDT chart on the H4 timeframe showcases a clear bullish trend transitioning into a consolidation phase. While higher highs and higher lows dominate the larger structure, the recent price action suggests indecision near resistance levels.

Key Observations:
Higher Highs (HH): The last significant HH was formed near $290 on January 18th.
Higher Lows (HL): A recent HL around $240 on January 20th indicates buyer support.
Resistance: $260–$290 is a critical resistance zone, with sellers defending this area.
Support: Strong buying interest is evident near $240, with the 20-period moving average acting as dynamic support.

🐂 Bullish Scenario:

The price has successfully maintained higher lows, and the moving average is sloping upward, signaling continued bullish momentum.
Consolidation near resistance can often precede a breakout (potential bull flag formation).
A breakout above $260 could trigger a Measured Move to $310–$320 (based on the prior $220–$260 rally).

Bullish Plan:

Entry: Buy above $260 on a strong breakout candle with volume.
Stop-Loss: Below $240, near the recent HL.
Profit Target: $310–$320 (measured move target).
Probability: ~60%, considering the sustained bullish structure and support from buyers.

🐻 Bearish Scenario:

The double top near $290 indicates strong resistance, with sellers actively defending this zone.
Failure to break $260 could lead to a pullback toward $220 or even $200.
Consolidation around resistance can also act as a distribution phase before a bearish move.

Bearish Plan:

Entry: Short below $240 on a confirmed breakout below support.
Stop-Loss: Above $260 (resistance zone).
Profit Target: $220 and potentially $200 (next major support levels).
Probability: ~40%, as the overall trend still favors bulls.

Educational Patterns for New Traders

Measured Moves:
The distance from $220 to $260 ($40) can be added to the breakout level, projecting a target near $300–$320.
Inside Bars:
Look for small candles within larger ranges, signaling indecision before potential breakouts.
Exhaustion Gaps:
Watch for sharp moves upward near $260–$290; they could signal buyer exhaustion rather than strength.
Higher Highs and Lows:
Bulls need a new HH above $290 to confirm strength, while bears aim for a LL below $240.

Trader’s Equation Summary
Bullish Plan: Risk = $20 (from $260 to $240); Reward = $50-$60 ($310-$320). Reward-to-Risk = 2.5:1 to 3:1.
Bearish Plan: Risk = $20 (from $240 to $260); Reward = $20-$40 ($220-$200). Reward-to-Risk = 1:1 to 2:1.
Final Thoughts:

SOL is at a critical juncture. While bulls maintain control, resistance at $260 is key. A breakout could signal a continuation to $300, but a failure might lead to a deeper correction. Stay flexible and patient for clear confirmation! ​

Do you think SOL will break through $260 resistance and hit $300, or will it retrace to $220? Share your thoughts and trading setups below. Let’s discuss the probabilities!