Solana price breaks out of bearish pattern, bull trap going into the weekend?
|- Solana price trades higher on slim volume ahead of key Jackson Hole Symposium.
- SOL price could eke out gains going into Friday morning.
- Expect a big disappointment that could drag cryptocurrencies lower throughout the weekend to new lows on Monday.
Solana (SOL) price is being taken over by forces from global markets as investors and traders are starting to cut the traded volume before the big catalyst event on Friday afternoon. With one of the most important Fed statements to be pronounced by Jerome Powell at the Jackson Hole Symposium, the thin liquidity offers a small window of opportunity to trade higher. Warnings are to be issued as traders will need to get out of those positions before the statement will take place, as the Fed is nowhere near ending its aggressive tightening cycle and will damp the positive mood in the markets with losses at hand for cryptocurrencies, including Solana.
SOL price could collapse 30% in a matter of minutes
Solana price is trading higher, with over 3% of gains built up during the European trading session. By doing so, SOL price is breaking out of the bearish triangle that got identified Wednesday and looked set to break below the monthly pivot at $34. Instead, bears are getting squeezed a bit and could see a further rally higher towards $40, but the time horizon is very small.
SOL price could be set in for a very negative surprise as markets start to front-run the possibility that the Fed speech on Friday afternoon will be a dovish one where Jerome Powell will commit to a less aggressive approach and might even say that interest rate cuts are soon set to kick in. Should Powell refrain from those comments, sentiment will get broken, and traders will want to rush to the exit with the sell-side exploding and running price action into the ground. That would mean one thing for Solana price: a falling knife in just a few minutes after his comments towards $26 and possibly even breaking below that towards $24, printing over 30% of losses.
With the statement, the market reaction will be very binary, within the paragraph above the negative outcome. For example, a positive outcome would be Powell saying that the Fed has done enough for now and hinting at a pause or slowdown of its rate hike pace, with rate cuts foreseen at the beginning of 2023. Experienced traders will have written out these scenarios and plan with, in this case, a Solana price spike higher above $40 to trade back above the monthly pivot, the orange ascending trend line and the 55-day SMA, with a follow-through granted towards $58.84 by the end of next week.
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