SOL at the Edge: Bear Trap Triggered, Liquidity Below 121—Eyeing 118 Before Any Bounce

Executive summary and directional bias

• Bias next 24h: Bearish continuation with a high probability of a liquidity sweep below 121.5–120.0, probing 118–119 before any meaningful bounce.
• Trade idea: Short on a weak bounce into 123.2–123.8 hourly supply. First objective 118–119 (daily lower-band/volume gap). Invalidation above 125.8–126.2 (back inside prior intraday range).

Step-by-step technical dissection

1. Market structure (multi-timeframe)

• Daily structure: Persistent series of lower highs and lower lows from late September (248) to mid-December (low 121s today). The last substantial lower high cluster sits around 143–145 (Dec 3–4), followed by successive lower highs at 139–140 (Dec 4–5), 137 (Dec 10–11), 133–134 (Dec 12–13), and 131.6 (Dec 17 intraday). Structure is unambiguously bearish.
• 4h/1h structure (today): Failed push to 131.62 at 14:00 UTC, immediately reversed with a large impulse sell candle at 15:00 (127.04 close) on elevated volume, setting a fresh lower high and breaking intraday demand. Subsequent hours stair-stepped lower to 121.57 (19:00 low) with shallow bounces, a hallmark of trend control by sellers.
• Key pivot: 11/21 daily swing low 122.27 has been marginally undercut intraday (121.57). Price is now hovering just above that pivot (122.35), a classic “decision” area. Without a strong reclaim, breakdown risk remains dominant.

2. Moving averages and trend filters

• Daily 20-SMA: Estimated around 134–136 given last 20 closes. Price at 122 is well below, confirming near-term bearish momentum and a downside volatility regime.
• Daily 50-SMA: Likely in the high 140s/low 150s; price far below. Trend, not just momentum, remains down.
• Daily 200-SMA: Likely ~190+, reflecting the much larger bearish macro structure since September.
• 1h MAs (10/20/50 EMA lens): Flat-to-down and fanning bearishly after the 15:00 rug-pull; fast MAs below slow MAs and price under all, suggesting rallies should be sold.
• Conclusion: MA stack points to trend-follow setups over mean-reversion.

3. Momentum oscillators

• Daily RSI: Likely high-20s to low-30s after the two-week slide from 145 to 122; this is “oversold,” but in strong downtrends RSI can embed sub-40 for extended periods. Oversold is not a buy signal in isolation.
• 1h RSI/Stoch RSI: Intraday prints show extended sub-40 with brief resets on small bounces (e.g., 20:00 to 23:00). This is typical of bearish impulses and favors continuation (RSI bear range behavior).
• Takeaway: Momentum confirms downside pressure with only tactical, shallow bounces expected.

4. MACD (trend-momentum)

• Daily MACD: Below signal line with an expanding negative histogram since early December; momentum to the downside is accelerating.
• 1h MACD: Bearish alignment post-15:00 breakdown; shallow bounces have not produced a bullish cross, signaling weak dip-buying interest.

5. Volatility envelopes (Bollinger, Keltner) and range context

• Daily Bollinger Bands (20,2): Midline near 135; lower band estimated near 118–119. Price is pressing the lower band zone. In strong downtrends, price can “ride the band,” with tags or pierces often extending a few percent below before mean-reversion bounces.
• Keltner Channels (ATR-based): Lower Keltner likely near 121–122. Price is now living near/below lower Keltner, indicating trend volatility is expanding; downside tails to 118 are feasible.
• Implication: First magnet 118–119 (lower band), with temporary overshoots to 116 possible on a stop run.

6. Volume profile and participation

• High-volume nodes (HVNs): 133–137 cluster from early/mid-December (supply). Price rejected the 131.6 approach today before even reaching that HVN, underscoring supply dominance below the 133–137 shelf.
• Low-volume area (LVN): 125–129 is relatively thin; once 127 gave way at 15:00, price traversed quickly to 122–123. Thin zones often get traversed again on attempts back up, suggesting failed bounces in 123–125 can be sold.
• Today’s distribution: Heaviest intraday sell volume occurred on the 15:00 breakdown; subsequent hours confirm follow-through rather than immediate absorption.

7. Fibonacci mapping (confluence)

• Swing A: Dec 3 high 144.90 to Dec 15 low 124.00. 38.2% retrace ≈ 132.0; 50% ≈ 134.45; 61.8% ≈ 136.9. Today’s rejection at 131.62 lines up near the 38.2%–prior resistance confluence; sellers stepped in early.
• Swing B: Nov 21 swing low 122.27 to Dec 3 high 144.90. A full retrace to 122 completed; common pattern is undercut-and-bounce or trend continuation to a measured extension. A 1.272 extension from the 124–145 swing projects into ~118–119, matching the Bollinger lower band and our first target.
• Net: 118–119 is high-confluence as a first destination.

8. Ichimoku Cloud diagnostics

• Daily: Price below cloud; Tenkan < Kijun with a bearish cross in early December; Chikou (lag) below price and cloud. Classic bearish alignment.
• 1h: Price and lagging span below the cloud, with the cloud ahead thickening bearishly after the 15:00 shift. Bounce attempts are likely capped near the Kijun/Tenkan cluster (123–125 region) before resumption lower.

9. Candlestick and intraday order flow cues

• 14:00 hour: Strong push to 131.62 but closed at the high; 15:00 immediately engulfed and broke structure to 127.04 with heavy volume. That sequence is a textbook bull trap followed by distribution.
• Subsequent hours show lower highs and closes near the lows, indicating weak demand. The minor 20:00 bounce to 123.55 failed to reclaim lost levels (supply now sits overhead at 123.5–124.0).
• Daily bar (in-progress): Large red body developing beneath prior key pivot 129–133, projecting further downside unless a late-session reversal absorbs supply (not observed yet).

10. Pattern recognition

• Bear flag and range break: The early-December 133–140 basing failed; we transitioned to a descending channel with a sharp breakdown today.
• Double-bottom watch: 122.27 (Nov 21) vs 121.57 (today). The undercut increases the odds of a reflexive bounce, but the absence of strong reclaim argues this is more likely a continuation sweep than a durable reversal.
• Measured move: Using the 131.6 to 127.6 micro-range (≈4), the breakdown projects to ~123 (hit) and the subsequent 124.5 to 121.5 leg (≈3) projects ~118.5 next.

11. Statistical/quant cues

• Daily ATR (visual estimate): ~6–8. A full ATR move down from 122 targets 114–116; a 0.5–0.75 ATR move targets 118–119, consistent with our base case.
• Regression channel: Price now ~1.5–1.8 standard deviations below a 20-day regression mean; the -2σ zone lines up close to 118. A quick stab to -2σ then a snapback is a common pattern.

12. Liquidity/stop-hunt framework

• Obvious liquidity sits below 121.5 (today’s low) and the round 120. Expect a sweep into 119s, potentially a wick to 116–117 before responsive buying. Above, liquidity pools are stacked near 123.5–124.0 (prior intraday highs) and 127.0 (breakdown pivot); those are likely fade zones.

13. Risk management and scenario planning

• Base case (60–65%): Bounce to 123.2–123.8 sells; continuation to 118–119; late-session stabilization 119–121.
• Bear extension (20–25%): Momentum breach of 118 leads to 116–116.5 wick before a stronger rebound to ~121.
• Bull surprise (10–15%): Strong reclaim of 125.8–126.2 invalidates the short and opens a squeeze to 127.0–129.5. Given today’s heavy distribution, this is the lower-probability tail.
• Suggested invalidation: 125.8–126.2 (above local 1h supply cluster and back inside the 16:00–17:00 breakdown region). While not part of the schema, a prudent stop would live there.

14. Synthesis and timing

• All major lenses (structure, MA stack, MACD, Ichimoku, volume, fib confluence, envelopes) align bearishly. The only near-term counter-signal is an oversold RSI, but the tape exhibits the “bearish RSI regime” where oversold persists and bounces are sold. Optimal execution is to let a bounce toward 123.5–124 refill shorts rather than chase the low. First take-profit sits at 118–119 where multi-tool confluence is strong.

24-hour price path expectation

• Path of maximum pain: Minor pop to 123.2–123.8 → roll-over → decisive breach of 121.5 → fast flush to 119.2–118.4 → reflexive bounce to ~120.5–121.5 by the end of the window. Extension risk: brief wick 116–117 if selling accelerates.

Conclusion

• Direction: Sell (Short). Favor shorting a weak bounce into 123.5 ± 0.3. Primary target 118.2. Invalidate above 125.8–126.2. This aligns with the downtrend, the failed 131.6 test, the heavy 15:00 distribution candle, and the 118–119 multi-signal magnet (Bollinger lower band + fib extension + low-volume pocket).