SOL Breakdown Retest Setup: Bear Trend Reasserts With $78 Support as the Magnet

Multi-timeframe context (Daily + Intraday)

Current price: $82.36

1) Primary trend (Daily structure)

• From mid-Nov (>$150) to now (~$82), SOL is in a clear primary downtrend with a sequence of lower highs and lower lows.
• The late-Jan to early-Feb leg is a capitulation-style selloff:
  • 2026-01-31 close ~$105 after a spike down to ~$100.
  • 2026-02-05 close ~$78 with an intraday low near $77.77 on very high volume.
  • 2026-02-06 then bounced to close ~$87 after a washout low near $68.69 (extreme volatility, “panic low”).
• Since 02-06, price failed to reclaim the prior breakdown zone (roughly $92–$100) and rolled back over.

Interpretation: The bounce from the $68–$78 panic zone looks more like a dead-cat / relief rally inside a broader bear trend rather than a confirmed reversal.

2) Key horizontal levels (Support/Resistance mapping)

Using recent daily highs/lows and closes:

• Immediate resistance:
  • $84.50–$85.10 (intraday pivots; multiple hourly reactions)
  • $86.70–$87.70 (recent daily closes and intraday supply; also where price spent time before breaking down)
  • $89.00–$92.00 (upper bounce area; major supply after the 02-05 breakdown)
• Immediate support:
  • $82.00–$82.60 (current area; today’s low zone)
  • $77.70–$78.20 (02-05 close/low area; first major support)
  • $68.70 (02-06 extreme low; “panic floor”)

Interpretation: Price is sitting on minor support (~$82) but the next meaningful support is materially lower ($78), creating air-pocket risk if $82 fails.

3) Intraday (Hourly) price action & microstructure

From the provided hourly sequence:

• Early hours: price slipped from ~87 to mid-85s, then continued grinding down.
• A midday attempt to reclaim ~84.6–85 failed (sellers defended the bounce).
• Late session: a more impulsive drop from ~84.7 to ~83.0 and finally to ~82.36, printing lows near $82.00–$82.02.

Interpretation: Hourly structure shows bearish acceptance below ~84.5 and a late-day breakdown. That often leads to either:

• continuation to the next support ($78 area), or
• a short-covering bounce back toward the breakdown level (~84–85) before continuation.

4) Moving averages (trend filter approximation)

Even without computing exact MA values, the daily series indicates:

• The short-term averages (e.g., 10/20-day) are very likely sloping down sharply after the late-Jan collapse.
• Price is far below the January regime (~125–145), implying it’s also likely below the 50-day.

Interpretation: MA regime is bearish (trend filter says favor shorts / fade rallies).

5) Momentum (RSI-style logic) & mean reversion risk

• The magnitude and speed of the decline from ~145 (mid-Jan) to ~78 (02-05) implies daily momentum likely reached oversold in early Feb.
• However, oversold can persist in bear markets; what matters is whether momentum has shifted to higher highs/higher lows—it hasn’t.
• Current hourly action is again weak into support, suggesting momentum is re-accelerating down rather than stabilizing.

Interpretation: There is some bounce risk (short-term oversold), but trend + structure still favor downside continuation.

6) Volatility / ATR behavior (risk environment)

• Daily candles around 02-05 and 02-06 show extremely wide ranges (high ATR regime).
• High ATR environments often produce violent countertrend bounces, but also fast breakdown continuations once a level gives way.

Interpretation: Expect wide intraday swings; better to place entries at resistance (for shorts) rather than chasing breakdowns at support.

7) Candlestick/price pattern read

• The early-Feb washout and bounce can be seen as a bear market “V-bounce” that failed to break structure.
• Today’s move resembles a bearish continuation day (lower close near lows, breaking the intraday base).

Interpretation: Pattern bias remains bearish, with a likely retest of $78.

8) Scenario forecast (next 24 hours)

Base case (higher probability): Bearish continuation with a retest lower

• A small dead-cat bounce toward $84–$85 is possible (typical breakdown retest).
• Sellers likely defend $84.5–$86.7.
• If price fails to reclaim $85 decisively, downside pressure resumes toward $80, then $78.2–$77.7.

Bull case (lower probability): Reclaim & squeeze

• If SOL reclaims and holds above $86.7–$87.7 on strong bid (not shown in current tape), shorts could get squeezed toward $89–$92.
• Given the broader downtrend, that would still likely be a sellable rally unless it breaks above $92 and holds.

Bear case (tail risk): Support breaks cleanly

• A clean break below $82.0 with momentum could accelerate quickly to $78.

Net 24h directional bias: Down / sell-the-rally, with expectation of a move into $78–$80 region unless $87 is reclaimed.

---

Trade plan (direction + optimal open)

Decision: Sell (Short Position)

Rationale (confluence):

• Primary trend: bearish (lower highs/lows)
• Intraday: breakdown below prior pivots (~84.5)
• Support stack: thin between $82 and $78
• Volatility regime: favors selling into bounces rather than shorting lows

Optimal open (entry)

• Preferred short entry: $84.80 (sell a rebound into the breakdown/retest zone $84.5–$85.1)
  • This improves reward/risk versus shorting immediately at $82.36 support.

Target (take-profit / close)

• Close price (take profit): $78.20
  • Aligns with the 02-05 breakdown/close zone and first major daily support.

(If price does not bounce and instead breaks $82 immediately, the market may run to target without providing the optimal entry. The plan above is designed to maximize expectancy by entering at resistance.)