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Market Direction

Bear flag forming in SOL as uptrend breaks down

Updated: Jul 25, 2024
Published: Nov 28, 2023
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SOL has rebounded into the underside of the horizontal resistance level of $56.40 while forming a bear flag.

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Unless $56.40 can be flipped back into support, we likely see a breakdown of the flag with a target of at least $52 - potentially $48.

TLDR

  • SOL rejected from the $56.40 resistance, now retesting it as a potential barrier.
  • A bear flag pattern is forming, targeting a breakdown to $52 or even $48.
  • The uptrend is broken, and SOL is still overbought on higher timeframes.
  • Watch for volatile breakouts. We will be making aggressive buys below $48.
Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.
SOL 4hr
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Technical analysis

  • Price has broken below the horizontal support of $56.40 and is now retesting the underside of it as a new resistance. If price can’t get back above and flip into support, we likely get further downside.
  • Price has also formed a bear flag with a breakdown target of $52.
  • SOL is still beneath its main uptrend line and will likely see further downside in the short term. 
  • The RSI has reset on all timeframes except the 3D and the Weekly, with both still being very overbought. 
  • The major supports are $48 and $52. We would be DCA buyers at both price points.  

Market mechanics

  • Open Interest remains high at $769m, indicating that the market is still somewhat overheated here.
  • The OI-Weighted Funding Rate is at 0.0080%. This suggests there is a clear balance between Longs and Shorts. And, when we see the Long/Short ratio at 0.9944, we can see just how balanced Longs and Shorts are here. 
  • The mechanics are showing a healthy setup overall despite the level of leverage being slightly on the higher/overheated side. 

Cryptonary’s take

SOL is at a critical level here. If it can clear above $56.40 and turn the local resistance into new support, then further upside may be had. However, SOL is in a bear flag pattern, beneath the $56.40 horizontal level and the main uptrend. This should have a downside target of $52. 

If SOL reaches $52, we would be DCA buyers at that price point. If SOL can reach sub $48, that’s where our DCA buys would become more aggressive.  

 

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