Short the Pop: Fading SOL’s 125 Supply Into a 122 Retest

Executive summary

• Bias for next 24h: Mildly bearish to range-bound. Expect a retest of 123.1 → 121.9 support with supply capping rallies near 124.9–126.2.
• Optimal plan: Fade a pop into 124.9–125.3 (confluence of hourly supply, 38.2% Fib, intraday VWAP band), target the 122.0–122.3 demand shelf.
• Invalidation: Hourly close above 126.2 flips bias to neutral/up toward 127.5–128.4.

1. Market structure and trend diagnostics

• Higher timeframe context (Daily): From early Oct peak ~235, SOL has been in a broad downtrend with persistent lower highs into Nov, then a December basing phase. The December low printed at 117.32 (12/18). Since then, price carved a shallow rebound to 129.30 (12/29) but was firmly rejected.
• Current regime: Sideways-to-down within a 119–129 bracket. Microstructure shows a lower high at 126.18 today (hourly) after yesterday’s 129.30 failure.
• Key swing points: • Resistance: 129.30 (12/29), 128.38 (12/22), 126.18 (today intraday), 124.95–125.50 (hourly supply pocket) • Supports: 123.10–123.30 (12/30, 12/29 pivots), 121.90–122.20 (61.8% retrace cluster), 120.80, 119.57 (12/19), 117.32 (12/18)
• Intraday structure (Hourly last 24h): Strong push to 126.18 at 16:00 UTC on above-average volume, followed by three consecutive lower highs and lower lows back to 123.78, finishing below session VWAP. That’s a classic failed breakout and supply reassertion.

2. Moving averages and trend filters

• 20D SMA ≈ 126.64 (estimated from last 20 closes). Price 123.78 sits ~2.3% below it → short-term bearish tilt.
• 50D SMA (indicative) above price, given Nov levels were 140–170 → medium-term downtrend intact.
• Daily EMA stack (qualitative): EMA(12) likely below EMA(26) with histogram starting to compress; still below zero-line → momentum recovery attempt but not confirmed.
• Takeaway: Below 20D/50D and below intraday VWAP → rallies should meet supply until key levels reclaim.

3. Momentum oscillators

• Daily RSI(14) estimate: mid-40s to high-40s (post-oversold bounce), consistent with weak-bearish/neutral regime.
• Hourly RSI: hovering near 45–50 after the post-126 fade; no clear oversold, allowing further drift down before a stronger bounce.
• MACD (Daily): Below zero with flattening histogram after the 12/18–12/29 bounce; a failed follow-through at 129 keeps MACD vulnerable.
• Stochastic (Hourly): Likely cycling down from overbought post-126.18 spike; supports short-term pressure into 123.1/121.9.

4. Volatility and bands

• ATR(14) Daily ≈ 5.0 (range compression vs early-Dec). Expect 24h range near 3.5–6.0.
• Bollinger Bands (20D): Midline ≈ 126.6; lower band estimated ~118–119; upper ~134–135. Price below midline → tendency to mean-revert up only if intraday strength reclaims 125–126. Under current rejection, path of least resistance is a drift toward the lower half of the band.

5. Ichimoku (Daily)

• Tenkan-sen (9-mid) ≈ (HH 129.30, LL 119.57) → ~124.44; price slightly below.
• Kijun-sen (26-mid) ≈ ~132.0; far above price.
• Cloud: Price is below the cloud; Chikou likely under price. Net bearish. Flat Tenkan at ~124.4 acts as magnet/resistance.

6. Fibonacci mapping (recent swing 12/18 low → 12/29 high)

• Swing: 117.316 → 129.304; range = 11.988.
• Levels: • 38.2% = 124.72 (confluent with intraday supply and Tenkan zone) • 50% = 123.31 (today’s pivot shelf) • 61.8% = 121.90 (major support cluster)
• Interpretation: Current 123.78 sits between 50% and 38.2%. A pop to 124.7–125.3 is a high-quality fade; a break below 123.3 opens 121.9 quickly.

7. Volume, VWAP, and order flow cues

• Daily volume: 12/29 selloff had elevated volume (4.87B) compared to prior days, signaling supply at 129. Today’s attempt to extend higher to 126.18 met sell pressure.
• Hourly 16:00 UTC candle had the highest volume of the day, closing at 125.54 after spiking 126.18 → classic up-thrust and absorption.
• Session VWAP (12/30) estimate: ~124.7–125.0. Current price 123.78 is below VWAP, signaling sellers in control on the day.
• OBV bias: Drifting lower since the 12/29 distribution day; lack of accumulation confirms sell-the-rip playbook.

8. Patterns and levels of interest

• Bearish rejection: 129.30 (12/29) and 126.18 (today) form a sequence of lower highs intraday.
• Support band: 123.10–123.30 acted as intraday pivot multiple times (hourly closes). A decisive hourly close below ~122.80 likely accelerates toward 121.90–122.20.
• Base risk: A double-bottom-style floor exists near 119.6–120.0 (12/19, 12/25). That’s the next larger demand if 121.9 fails.

9. Multi-scenario pathing (next 24h)

• Base case (≈60%): Rallies stall 124.7–125.5; price rolls back to test 123.3 and probes 122.0–122.3. Intraday low could print 121.9–121.6 on stop sweeps before a late bounce.
• Bull case (≈25%): Sustained bid reclaims 125.5 and closes an hour above 126.2. Then a squeeze toward 127.5–128.4, with daily 20SMA/BB midline (~126.6) acting as springboard. Requires volume expansion and OBV turn.
• Bear extension (≈15%): Immediate slip under 123.1 leads to 121.9 quickly and bleeds into 120.8. Only modest probability today given proximity to fib support and year-end liquidity, but must be respected.

10. Confluences that inform the trade

• Sell zone alignment: 124.7–125.5 = 38.2% Fib (124.72) + daily Tenkan (~124.44) overhead + session VWAP band (~124.7–125.0) + hourly supply from the 15:00–16:00 distribution.
• Target alignment: 122.0–122.3 = 61.8% Fib vicinity (121.90) + prior day low zone (122.43) + round-number magnet 122.
• Invalidation: 126.2 = today’s spike high vicinity and hourly structure break; above here, sellers lose control and the squeeze risk rises toward 127.5–128.4.

11. Risk management blueprint (for context)

• Entry: Limit sell 124.95 (willing to shade 124.7–125.3). If no pop, optional secondary entry on breakdown: sell 122.80 retest, targeting 121.9, but primary plan prefers fading strength.
• Stop (not required in output, but recommended): 126.60 (above supply and 12/30 high), risking ~1.65.
• Take-profit: 122.10, offering ~2.85 reward from 124.95 entry; R:R ≈ 1.7:1. Trail partial if 123.30 snaps on momentum.

12. What flips the script

• Hourly close > 126.2 with rising volume and OBV uptick. That would likely carry to 127.5 first, then 128.4–129.3 gap fill attempts.

Conclusion and 24h outlook

• With price below the 20D SMA, below session VWAP, momentum neutral-to-weak, and clear overhead supply at 124.9–126.2, the higher-odds tactic over the next 24 hours is to sell into strength near 124.95 and target the 122 area. Expect a choppy drift with a downside skew; key supports to watch are 123.30 and 121.90.