SOL Rebound Hits Supply: High-Probability “Sell-the-Bounce” Setup Into $131–134 Resistance

Market Regime & Context (Daily)

• Current price: $130.99
• The larger swing from late Oct ($190–205) to late Dec ($120–126) shows a clear medium-term downtrend (lower highs/lower lows).
• Since mid/late Dec, price action is range-to-slight-recovery: repeatedly finding demand near $119–126 and failing in the mid-$140s.

Key daily structure

• Major support zone: $125–126 (recent breakdown level & frequent pivot), then $122, then $119–120 (December capitulation base).
• Major resistance zone: $133–134 (broken support/now supply), then $138–140, then $145–147.

The latest daily candle (2026-01-21) shows a rebound from $125.70 low to $130.99 close, i.e., a strong intraday recovery following the prior day’s selloff (2026-01-20 close ~$125.71). This often creates a short-term mean-reversion bounce, but in a broader downtrend it also frequently becomes a pullback into resistance.

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Intraday (Hourly) Price Action & Order Flow Read

• From 00:00–15:00, SOL grinded up from ~127 to 130.39 (constructive).
• At 16:00, a sharp drop to 126.14 (liquidity sweep / stop run).
• Then heavy bid returned: 19:00 hour spiked to 131.36 (aggressive buy program / short covering), followed by consolidation around 130.9–131.0.

Interpretation:

• The market likely completed a selloff → sweep → reclaim sequence, which can produce a follow-through push.
• However, the rebound is now pressing into a known supply band (prior broken support) around $131–134.

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Trend & Moving-Average Logic (Price Location)

Without computing exact MA values, the daily series strongly implies:

• Price is still below the declining medium-term averages (e.g., 50D would be well above $130 given the Oct–Nov levels).
• This keeps the primary trend bearish.

Implication: bounces toward resistance are more likely to be sold than to start a sustained uptrend, unless price can reclaim and hold above multiple resistance layers (first $134, then $140).

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Support/Resistance, Supply/Demand & Market Geometry

Immediate levels (24h tactical)

• Support 1: $129.5–130.0 (micro base after the spike)
• Support 2: $127.4–127.6 (frequent hourly pivot)
• Support 3: $125.6–126.2 (sweep low / key demand)
• Resistance 1: $131.3–131.8 (recent hourly high / supply reaction)
• Resistance 2: $133.3–134.4 (daily pivot & breakdown area)

Geometry call: price is currently between Support 1 and Resistance 1, i.e., at the top of a short-term rebound leg.

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Volatility / Range Expectations (ATR-style reasoning)

Recent daily candles show frequent $6–$12 high-low ranges (e.g., 01-20: ~134.4 to ~125.7). Intraday today also exhibited a wide swing.

24h expectation: a realistic next-24h move is a retest of $133–134 or a pullback toward $127–128, with a meaningful probability of revisiting $126 if rejection is sharp.

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Pattern & Scenario Analysis

Bull case (less likely unless breakout confirms)

• Hold above $129.5–130.
• Break and hold above $131.8.
• Then attempt $133.5–134.4; if accepted, extension toward $138–140 becomes plausible.

Bear/base case (higher probability given higher-timeframe trend)

• Bounce stalls into $131.5–134 supply.
• Price rolls over and retests $129.5 then $127.5.
• If $127.5 fails, magnet is $126.0 and potentially $125.5.

Given the dominant downtrend and the fact that price is approaching resistance after a sharp rebound, the statistically cleaner trade is to sell into resistance rather than chase the bounce.

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24-Hour Forecast (Directional Bias)

Bias: mild-to-moderate down (pullback/rejection).

• Most probable path: probe $131–133 → rejection → drift back to $128–129.
• Alternate path: if $133.5–134.4 breaks and holds, bearish thesis weakens and price can squeeze to $138–140.

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Trade Decision (Tactical)

Decision: Sell (Short Position)

Rationale:

• Higher-timeframe trend remains bearish.
• Current price is near the top of the rebound, close to first resistance.
• Better R:R typically comes from shorting into $131–134 supply with a target back toward the reclaim/sweep zone.

Optimal Open (Entry)

• Open Price (sell): $131.60
  • This is near the recent hourly supply (131.3–131.8). If price retests that area, it offers a higher-quality entry than shorting at $130.99.

Take Profit (Close)

• Close Price (take profit): $127.80
  • Aligns with the repeated hourly pivot zone (~127.4–127.6) and sits above the deeper $126 demand to improve fill probability.

(Risk note: a sustained acceptance above $134.4 would invalidate the “sell the bounce” thesis and typically calls for a stop above that zone in real execution.)