Solana bulls buy the dip buy SOL upside potential is capped at $280

Solana price dropped 9% during market-wide sell-offs in response to uncertainty involving the Evergrande fiasco.
Buyers stepped in and rallied Solana back above the daily Tenkan-Sen.
Upside potential is limited while downside risks remain.

Solana price was at more risk of a catastrophic move lower during Wednesday’s selling pressure than most cryptocurrencies. It is a testament to Solana’s strength and bullish sentiment that not only was the retracement limited, but Solana continued to trade near its all-time highs. Two trade possibilities are now present.

Solana bounces hard after market-wide sell-off, but the near-term direction is not clear

Solana price has a theoretical long setup with a buy stop order at $252.50, a stop loss at $242.50 and a profit target at $297.50. However, the entry has some conditions to trigger. At least a triple-top or split triple-top must form at $250 for the entry to become valid. The reason for this is due to the extended column of Xs in the current X column. Therefore, a pullback is necessary to confirm that any breakout above $250 would likely be sustainable. Additionally, while the projected profit target is at $297.75, the psychological number of $300 will likely be the most likely to get hit.

SOL/USDT $2.50/3-box Reversal Point and Figure Chart

The long side of the trade will be invalidated if the current X-column hits the entry before a triple-top develops or if Solana price moves below $220.

On the short side of the market, a hypothetical short entry is developing based on a Pole Pattern. The short entry idea would be a sell stop order at the three-box reversal of the current X-column (currently at $230 at the time of publishing), a stop loss of four boxes and a projected profit target at $155 – but the downside profit may be limited to the support structure on the uptrend angle at $180.

SOL/USDT $5.00/3-box Reversal Point and Figure Chart

If Solana reaches the $300 value area, then the hypothetical short entry idea is invalidated.

Share: Cryptos feed

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.