Corrections: Price action analysis of SOLUSDT

Until yesterday, I was mostly longing the market in hopes that we’ll see more swing highs, but of course with my stop in place in case it didn’t turn out how I’d predicted. Fortunately (or should I say unfortunately) it indeed went south and I exited the market with some loss. I have since stayed out of the market, watching to see where the market trends next. A continuation, or a pullback/correction in the form of a reversal?

At the time I’m writing this, most coins have fallen by at least 10% of their trading quotations in the last 24 hours, with recently volatile ones like Solana leading by about close to 15% drops. Seems like now would be a good time to short the corrections a bit, riding it out to the bottom where we long back up into the bull we love.

I’m not sure exactly why we’re seeing the correction now. Popular opinion might be some sort of news. I say it’s just the market doing its thing – Up, Down. We’ve seen higher highs so much that it’ll be naïve not to have seen these corrections coming. But sometimes in the midst of joy, common sense goes out the window, and this is probably what happened for some people.

How steep will the corrections get?

I obviously can’t tell. But if I had to take a guess, I’d say it’d take a few days at least, maybe even weeks. I am fully aware that BTCUSDT is the standard chart to compare to to determine market directions, but since SOLUSDT is the pair I like trading, that’s what I’m going to do my break down and analysis with.

Since March, the market has been trending up and we’ve had a very clean trendline….until around 2am UTC today when that clean trendline was broken. Price bounced back, retesting the trendline and was rejected, falling into a channel with several higher lows and lower lows at this point, matching what could be a possible downtrend.

Because of how much the market has trended, I believe the correction will be as fierce.

I believe Solana will in the short term continue to trade in the lower half of the price channel formed, down to around the $164 region where it will test the major bearish trendline of the channel, breaking out to go back into an uptrend. Here’s why I think this…

Within the price channel I just showed you, there’s a descending wedge formed which suggests that price will in fact break out further below the price channel. If this happens, the $164 range looks like the next support to hold the breakdown. As the wedge gets tighter, a breakout will be imminent to occur, and this will bring price back into the wedge where it’ll trade back to the trendline and hopefully break it.

It is also very likely that even though the wedge becomes tight, price will continue to trade within its boundaries, getting tighter and hence steeper, down to around the $150 region. For me, I won’t be making any moves, long or short at this point until price trades back into the upper half of the price channel shown here.

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**This is not financial advice. Merely an amateur’s analysis of possible moves the market might take. Please don’t make any financial decisions solely based on the information here, but do your own research. But if you will, you’re completely responsible for any wins or losses. *

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All images here are screenshots from my analysis on tradingview.com

Posted Using InLeo Alpha