I was completely panicked after finishing the SOL liquidation heat map; the short-term big pit has been dug, and if it breaks 85, it's completely over!
I currently feel quite uncertain about SOL. I'm cautious in the short term, but I still have some optimism for the long-term ecosystem. SOL is tied to Bitcoin, and as Bitcoin goes down, this highly volatile coin will surely take a hit. The current expectations for Federal Reserve interest rate hikes are chaotic, the dollar is tight, and institutional funds are not helping; it's hard for SOL to pull itself up in the short term.
Personally, I'm quite worried that this wave of macro adjustments isn't over, and it will drop more severely. But in the long run, AI combined with blockchain is the main theme. SOL's low fees and high speed are suitable for AI projects, and I think this is the foundation for its rebound. The developer community is large, new projects are launched quickly, the Firedancer upgrade continues, and network performance is getting better; I believe this area can perform well in the long term. However, the competitive pressure is great; Ethereum Layer 2 is both cheap and compatible, grabbing DeFi and NFT users, and new chains like Aptos and Sui are also competing for attention.
If SOL does not maintain a leading position in speed and ecosystem, its valuation will be easily suppressed. Technically, the price has slid from a high of 93.46 to a low of 85, and now it's rebounded to 86.39, but it hasn't broken the previous high; MA5 is turning down, and I think the rebound strength is clearly insufficient, leaning bearish in the mid-term. If it can't hold the support at 85, we will look at 80-82, with resistance first at 90, then at 93.46; it needs volume to break through. High volume at the top is dropping, low volume at the bottom is rebounding, and buying pressure is weak. MA5 crossing MA10 creates a death cross, and the moving averages are pressing down on the price. Looking at the liquidation heat map, there are a lot of long liquidation orders piled up at 90-93; once the price goes up, there will be strong selling pressure; there are fewer short liquidation orders at 85-87, and short confidence is stronger.
My personal judgment is that a rebound to around 90 is likely another trap, and it will fall back to 85. In conclusion, a short-term rebound to 90 in the next 1-3 days is dangerous, and it's very likely to retreat and test 85. In the mid-term, we need to wait for Bitcoin to stabilize and for AI to be beneficial, or for it to really break 93.46 and stabilize with volume.
In terms of trading, I advise cautious people to wait and see for clear signals of holding 85 and breaking 90. For those wanting to jump in, lightly short around 90 on the rebound with a stop loss at 93.5, lightly long near 85 with a stop loss at 83.5, and keep position sizes small with strict stop losses. I'm just worried that unexpected interest rate hikes from the Federal Reserve or a sharp drop in Bitcoin could lead to a crash, or that a large buy order could violently break through 90-93 and force a short squeeze, at which point one must run immediately.
For those wanting to flip positions or recover losses but don't know how to proceed, you can follow me.
