Solana [SOL] traders can leverage this model to their advantage

At Solana’s [SOL] the fall of the wedge revived its short-term bearish inclinations. Thus, the alt fell below the 20 EMA (red) and the 50 EMA (cyan) while forming a bearish pattern within the 4-hour time frame.

Alongside Fibonacci 61.8 support, two-month trendline support (white, dotted) has cushioned recent retracements.

Any break below the current pattern may open the door to a short-term decline before any realistic chance of recovery. At press time, SOL was trading at $32.8575.

SOL 4-Hour Chart

Source: TradingView, SOL/USD

SOL’s reversal from the $42 mark pulled the alt below its short-term EMAs. The bearish south-facing crossover of the 20/50 EMA further weakened the buying rallies.

Over the past couple of months, trendline support (white, dotted) has taken an important area of ​​value. Since the bulls flipped this line to immediate support after breaking it on the previous rally from the rising wedge.

SOL’s recent moves have drawn a bearish pennant on the chart. The price action appeared to consolidate while the 20 EMA posed strong resistance.

A potential close below the setup could help sellers test the $31-$32 range in the coming sessions. A close below this level could hint at further decline to retest the two-month trendline support.

However, the 61.8% support could help bulls avoid further declines. A convincing close above the 61.8% level could extend the compression phase near the 20 EMA before a volatile move. Any bearish invalidation could see a bearish counter in the $34-$35 range.


Source: TradingView, SOL/USD

The Relative Strength Index (RSI) has failed to find a place above the 45 point resistance over the past few days. Given its sideways tendencies, buyers still have a long way to go to shift the broader outlook in their favor.

Interestingly, the Accumulation/Distribution line has recorded lower lows over the past three days. Thus, a bounce from its immediate trendline support could affirm a bullish divergence with the price. This could help bulls hold the 61.8% level on the chart.

Also, traders should pay attention to AOs that close above the zero line to determine a change in market momentum before placing calls.


Given the bearish pattern near its south-facing EMAs, SOL might continue its devaluation in the coming sessions. The triggers and take profit levels would remain the same as above.

A potential accumulation on the A/D indicator and the 61.8% support could hamper short-term selling efforts. Above all, investors/traders should keep a close eye on Bitcoin [BTC] movement to determine its effects on general sentiment.