SOL: Dead-cat bounce into 129–132 likely before the next leg lower

Executive summary

• Bias next 24h: Short-term bounce into 128.5–132.0 likely, then continuation lower toward 123–125. Overall trend remains bearish; rallies are sell opportunities.
• Trade idea: Fade the first retracement toward 129.1–132.3 (Fib 23.6–38.2% and intraday R1) targeting the high-121/low-122 support cluster.

Multi-timeframe structure

1. Trend (Daily)

• Market structure: Clear sequence of lower highs and lower lows from late October highs (~200+) to current 125.74. Recent progression: 144.90 (12/3) → 139.01 (12/4) → 137.90 (12/9) → 136.47 (12/10) → 136.37 (12/11) → 133.25 (12/13) → 129.48 (12/14) → 125.74 (today). Bearish channel intact.
• MAs: 20D SMA ≈ 135.14; price is ~7% below it (bearish). 5D SMA ≈ 131.43 < 20D SMA (bearish momentum). 50D SMA (approx) sits well above price given the October/November levels (bearish long-term slope). EMA stack would be downward sloping.
• Bollinger Bands (20,2): Basis ≈ 135.14; σ ≈ 4.81 → Upper ≈ 144.77, Lower ≈ 125.51. Price is hugging the lower band (today’s low 124.02 pierced it), signaling short-term oversold with bounce risk, but still within a downtrend regime.
• RSI(14): Approx ~49, but note that recent sequence of red days has shifted momentum negatively. Daily is not deeply oversold, which leaves room for further downside after any bounce.
• MACD (qualitative): Below zero and likely widening negative histogram after multiple down days—trend-following pressure remains to the downside.
• Ichimoku (Daily approximations):
  • Tenkan (9-period mid) ≈ (12/4 high 146.72 + 12/1 low 123.31)/2 ≈ 135.0.
  • Kijun (26-period mid) ≈ ~146.7.
  • Price (125.7) is below Tenkan, Kijun, and likely below a cloud spanning ~140–150. Strong bearish alignment; however, distance from Tenkan favors mean reversion up toward ~135 before next selloff.
• ATR(14) (rough): ~8–10. A 24h move of 6–9 points is plausible, so both a bounce to 129–132 and a drawdown to 122 are within typical range.

2. Intraday (Hourly)

• Today’s path: Controlled grind higher into 134.27, then sharp selloff: 14:00–18:00 UTC cascade to 124.02, large volume spike around 15:00 (capitulation-like). Subsequent stabilization and mild bounce to ~125.8–126.2.
• Hourly momentum: Likely printed bullish divergence after the 18:00 low (price made a lower low vs. 15:00, momentum probably a higher low), consistent with a corrective bounce.
• VWAP/Anchored VWAP: Intraday VWAP (from session open) sits far above current price (~131–132 by inference). Price below VWAP = sellers in control; first test of VWAP/MA cluster often rejects in downtrends.
• Pivot levels (based on today’s H/L/C ≈ 134.27/124.02/125.74):
  • Pivot P ≈ 128.01
  • R1 ≈ 131.99
  • R2 ≈ 138.25
  • S1 ≈ 121.76 These align neatly with Fib retracement zones and prior structural levels.

Key levels and confluence

• Supports: 125.5 (lower Bollinger band), 124.0 (today’s low), 122.3 (11/21 swing low), 121.8 (S1 pivot), psychological 120.
• Resistances: 128.0 (daily pivot), 129.1 (Fib 23.6% of 145.73→124.02), 131.9–132.3 (R1 + Fib 38.2%), 134.9 (Fib 50% and local breakdown zone), 135.1 (SMA20/Tenkan).
• Volume nodes: Heavy activity in 132–135 region throughout December—a likely supply pocket on first retest from below.

Pattern diagnostics

• Descending channel: Price riding the lower boundary after today’s flush. Typical behavior: short-term relief bounce toward mid-channel (~129–132), then another leg lower.
• Bear flag probability: Any slow, overlapping uptick into 129–132 likely forms a flag that resolves down given dominant trend.
• Elliott wave sketch: From 12/3 high (145.7) a 5-wave down is plausible. Today’s drop resembles sub-wave iii; a sub-wave iv bounce to 129–132 into resistance is reasonable, followed by a v toward 121–123.
• DeMark/Exhaustion: The intraday capitulation hints at short-term exhaustion, but daily count likely not fully reset; favors bounce-then-down continuation rather than full trend reversal.

Fibonacci mapping (12/3 high 145.73 → 12/15 low 124.02)

• 23.6%: 129.15 (first reaction sell zone)
• 38.2%: 132.31 (confluence with R1 and supply)
• 50%: 134.88 (deeper, less likely without catalyst)
• 61.8%: 137.42 (bullish reversal threshold if reclaimed; currently unlikely near-term)

Scenarios for next 24 hours

• Base case (55%): Mean-reversion pop into 128.5–130.5 during Asia/early Europe, stretch to 131.5–132.3 possible. Sellers reassert near R1/Fib 38.2%, rolling price back to 123.5–125.5 by end of window. Close near 124–126.
• Bear acceleration (25%): Weak bounce stalls below 128; breakdown through 124 → 121.8 (S1) test; intraday wicks into 120–121 possible on momentum extension.
• Squeeze risk (20%): Oversold squeeze through 132.3 toward 134.5–135.5 (50% retrace + Tenkan/SMA20). Still likely to fail without structural shift and would set a higher-odds short later.

Indicator-by-indicator verdict

• Trend MAs/EMA stack: Bearish; favors selling rallies.
• Bollinger: Lower-band tag invites bounce, but bands widening suggest trend pressure remains down; use bounce to sell.
• RSI: Mid-40s to 50 on daily with negative skew; room lower after bounce.
• MACD: Below zero with negative histogram; stay with trend.
• Ichimoku: Price far below Tenkan/Kijun/cloud; rallies to Tenkan (~135) are sell zones.
• Pivots/Fibs: Confluence at 129.1–132.3 as ideal fade area.
• Volume/Order flow: High-volume dump then tepid demand; supply likely overhead 131–135.

Risk management notes (for context)

• If shorting a bounce to ~129.1, a logical invalidation sits above 134.9–135.2 (Fib 50%/Tenkan/SMA20). That yields attractive R:R to 122.3.
• If price fails to bounce and instead breaks 124 quickly, momentum entries on a retest of 124–125 from below target 121.8–122.5.

Conclusion and 24h call

• Dominant trend is down. Expect a relief rally into 128.5–132.0 that fades. Best edge is to Sell (short) a retracement into the 129.1 confluence, targeting 122–123.

Trade plan (next 24h)

• Decision: Sell (Short Position)
• Open (limit) near 129.15 (Fib 23.6% / prior close ~129.48 / near daily pivot region)
• Target (take profit): 122.30 (prior daily swing low cluster ~122.27, near S1)
• Optional (not required): A prudent protective stop would sit near 135.0

Price path prediction

• Likely path: 125.7 → 128.8–129.5 (Asia/Europe) → spike/press to 131.5–132.0 (if liquidity allows) → rollover → 124.5–123.0 by US close/late session.