SOL breaks the floor: Short the 205–208 bounce, target 193 as volatility expands

Executive summary

• SOL just broke a multi-week range to the downside with a high-volume intraday flush from ~224 to ~202, landing near the 78.6% retracement of the 9/25→10/2 advance. Short-term momentum is decisively bearish; a reflex bounce into 205–208 (prior support turned supply) is likely to be sold.
• Base case for the next 24 hours: a weak bounce toward 204–208 fails, followed by continuation into 197–195, with risk of an extension to 192–193 if sellers press into weekend liquidity.
• Strategy: Sell the bounce. Optimal entry zone 205–206 (limit). First profit objective 193 area (near daily support and measured objectives). Invalidation above ~211–213 (broken shelf / hourly pivot cluster).

1. Multi-timeframe market structure and trend

• Higher timeframe (Daily, July→Oct):
  • July–mid-Sep uptrend accelerated from ~160s to 253 (9/18), then distribution between 228–243, lower highs after 9/18 and a decisive breakdown late Sep (9/22–9/25) to 192, followed by a corrective rebound to 235 (10/2). Since 10/2, price has carved lower highs (235→233→229→229→221), culminating in today’s breakdown to ~202.
  • Structure: clear loss of momentum, failed retest attempts of mid-230s, and a shift to lower highs/lows. Today’s move confirms a break below the post-9/25 higher-low sequence.
• Intermediate (Daily swing since 9/25):
  • Swing low 192.38 (9/25) → swing high 234.86 (10/2) → lower high 233.00 (10/3) → RH 229.10 (10/8) → RL 220.99 (10/9) → breakdown 201.74 (10/10). The 221–223 neckline area failed decisively.
• Intraday (Hourly 10/9–10/10):
  • Sideways 218–224 overnight → 15:00 UTC rug pull to ~210 with volume spike → persistent sell program to 203–202 late session. No meaningful absorption; late prints into the lows.

2. Key levels (confluence of historical S/R, swing pivots, and intraday nodes)

• Resistance/supply above:
  • 205–208: prior support shelf (9/30–10/1–10/6 pivots), today’s post-flush micro-bases; aligns with pivot S2/S3 retests and likely intraday VWAP reversion zone.
  • 210–213: broken demand now supply; includes 9/29 close 213.05 and today’s 16:00–17:00 pivots (211.21). Above here, 221–223 is a larger neckline/shelf, but unlikely in the next 24h without a shock.
• Immediate supports below:
  • 200.0: psychological big figure and local round-number magnet. First line of defense.
  • 197–197.5: 88.6% retrace of 9/25→10/2 leg; 9/1 close 197.11; dense prior trade. High-prob tag if 200 fails.
  • 193–193.5: measured objectives (see below) and near 9/25 rebound zone; front-runs 9/25 low of 192.38.
  • 192.4: 9/25 capitulation low; strong higher-timeframe level.

3. Candles and patterns

• Daily: today prints a wide-range bearish expansion candle that closes near the low, likely outside/below the lower Bollinger Band (bearish volatility expansion). This validates a break of the 221–223 neckline (range top was 228–235). Measured move of a small head-and-shoulders/top: head ~235, neckline ~221 → 14 points → objective ~207 (achieved) with extension under high volume.
• Intraday: clean trend day down with shallow bounces and no end-of-day squeeze, typical of momentum continuation or, at minimum, a dead-cat bounce next session into supply.

4. Volume and participation

• Notable intraday spike at 15:00 UTC (the break bar). Subsequent bars show persistent supply and no responsive buying into the close. This is classic distribution → breakdown volume signature, favoring continuation after a modest bounce.
• Daily volumes in late Sep/early Oct elevated on down days versus up days, indicating net distribution.

5. Moving averages (approximations from the provided data)

• 20D SMA ≈ 218.4: price has broken well below; bearish short-term trend.
• 50D SMA ≈ low 210s (est.): price below; confirms intermediate bearish bias.
• 200D SMA (est. high 180s/low 190s based on earlier series): price still above, so secular trend intact, but short/intermediate trends are down.
• EMA stack (10/20/50): bear aligned with downward slope; rallies likely capped into the 205–213 zone until reclaimed.

6. Oscillators

• Daily RSI(14) est. ~49: not yet oversold on daily, leaving room for further downside; aligns with trend continuation potential. Short-term (hourly) RSI likely hit oversold extremes, supporting the idea of a reflex bounce first, then continuation.
• Stochastic: on daily likely crossing down from mid-levels; intraday embedded in bear mode. Expect a brief reset on bounce, not a full trend change.
• MACD (daily): bearish crossover post-10/2 with expanding negative histogram; momentum pointing down.

7. Bollinger Bands and volatility

• 20D basis ~218.4; lower band est. ~198–201 given recent dispersion. Today’s close near/below the band implies a volatility expansion regime. Statistically, a mean-reversion bounce of a few percent is common, but in expansion regimes the first retest up is often sold.
• ATR(14) daily estimated ~12–13. Today’s range is consistent with a high-ATR day. Into the weekend (thinner books), a 10–15 point travel is feasible.

8. Fibonacci and measured levels

• 9/25 (192.38) → 10/2 (234.86):
  • 38.2%: 218.64 (broken), 50%: 213.62 (broken), 61.8%: 208.64 (broken), 78.6%: 201.45 (tagged), 88.6%: 197.19 (next magnet). This is a textbook scenario: first tag of 78.6% produces minor bounce; deep retrace to 88.6% is common in weak tapes.
• Broader H&S/double-top style measurements:
  • Neckline ~221; head ~234–235 → MM ≈ 207 (hit). Larger range break 228–235 toward 221 suggests overshoot potential toward 200 and 193 if momentum persists.

9. Pivot points (classic; from 10/9 H/L/C = 229.32/217.20/220.99)

• P ≈ 222.50, S1 ≈ 215.69, S2 ≈ 210.39, S3 ≈ 203.57. Price sliced through S3 and settled below, which statistically favors either:
  • A bounce toward S2/S1 on the next session and rejection; or
  • A drift lower to new supports if bounce fails to materialize. Given the strong push, the bounce-to-fade is higher probability.

10. Ichimoku (qualitative)

• Price below Tenkan and Kijun, and below the Cloud. Likely bearish Kumo twist ahead; Chikou under price. Full bearish configuration, consistent with selling rallies.

11. Elliott wave framing (tactical)

• Potential 5-wave decline from 10/2 high:
  • Wave 1: 235→221 (10/2→10/7), Wave 2: 221→229 (10/8), Wave 3: 229→203/202 (today, extended), Wave 4: bounce to ~205–210 likely, Wave 5: 195–192. This maps well to our trade plan.

12. Liquidity/flow considerations

• 200 is a natural liquidity pool; expect stops/liquidity sweeps. If 200 breaks during low-liquidity weekend hours, a quick air pocket to 197–195 is plausible before mean reversion.
• If a strong buyer step-in were imminent, we would expect a late-session squeeze or absorption—absent here.

13. Scenario analysis for the next 24 hours

• Base case (60%): Bounce to 204–208 fails; rollover to 197–195; spike lows could probe 193–192 before stabilizing. Close likely 196–201.
• Bear extension (25%): Minimal bounce; quick break of 200 leads to 192–193 tag; possible wick to 190–191; then reflex rally back above 195.
• Bull surprise (15%): Fast reclaim of 210–213 (invalidates the short idea); squeeze toward 218–221 (20D base). This would require clear, impulsive buy flow.

14. Risk management and trade plan

• Bias: Sell strength in a new bearish volatility expansion below broken support.
• Entry: Limit sell 205.8 (midpoint of 205–208 supply; near S2 retest/VWAP reversion candidate). If no bounce, secondary plan: sell breakdown-retest near 200.4 after a clean break and retest from below.
• Target: 193.2 (front-running the 192.4 daily low and measured targets; aligns with wave-5 completion zone).
• Invalidation/stop (for execution, though not requested in outputs): 211.5 (above 16:00–17:00 pivots and the 210–213 supply shelf). R:R ≈ (205.8→193.2 = 12.6 reward) vs (205.8→211.5 = 5.7 risk) ≈ 2.2:1.
• Management: If entry triggers and price stalls above 197–198, scale 25–33% at 197.6 to lock gains; trail remainder to a prior 1H lower high. If the market immediately flushes through 200 without tagging entry, use the alternate plan (breakdown-retest) with tighter stop.

15. Bottom line

• Trend: down on short/intermediate timeframes.
• Momentum: bearish with fresh expansion.
• Location: just above major psychological level (200) and near deep retracement levels—bounce likely, but sellers control.
• Probability-weighted path: Sell the bounce into 205–208; target 193 region within 24 hours unless invalidated by a reclaim of 211–213.