The market is calm, but both bulls and bears are secretly competing around the $125.8 mark.
The SOL market this weekend is quite tangled. The price seems to be stuck in a quagmire, rubbing back and forth around $125.8, making many short-term traders doze off. But as an old hand, what I see is not boredom, but the calm before the storm.
The information on the chart can no longer be hidden: I am more inclined to believe that SOL will first step down before reaching new highs. Let me explain slowly.
01 The 'clear cards' and 'hidden lines' in the news
The most eye-catching news this weekend is undoubtedly a certain publicly listed company announcing the establishment of a $100 million special fund to invest in the Solana ecosystem. This is undoubtedly a strong boost for the development of the Solana ecosystem, indicating that institutional funds are actively positioning themselves.
However, there is a key point we need to be cautious about: in the crypto world, good news turning into bad news is not uncommon. The large funds' accumulation methods are often contrary to retail investors' 'buy high and sell low'; they prefer to 'wash the market with good news' and absorb enough chips at low points.
At the same time, there are hidden worries in the fundamentals. Activities on the Solana chain have continued to decline since last August, with weekly network fees dropping from 7 million USD to 4.5 million USD, and DApps revenue also falling by 30%. This indicates that despite long-term benefits, short-term network demand is indeed weakening.
02 Technical aspect: Key positions of long and short game.
From a technical perspective, the current chart is very clear:
Upper resistance: 130 USD and 134 USD are like two mountains. Especially 134 USD, which is the previous high point, has accumulated a large amount of trapped positions, making the pressure considerable.
Lower support: 121 USD is the first line of defense recently, while 116 USD can be seen as the 'lifeline' of this upward trend. Once effectively broken, the short-term trend may turn bearish.
Currently, the MACD indicator has formed a death cross, and trading volume has shrunk, clearly indicating that there is insufficient willingness to chase highs in the weekend market, and the bullish force is resting. It is extremely difficult to expect to break through the previous high of 134 USD directly under such circumstances.
03 My prediction: first step down then pull up, what is the logic behind it?
I judge that SOL will first step down, the core logic is:
Main funds are good at leveraging market psychology. During the weekends when liquidity is relatively low and market sentiment is cautious, they push prices down to flush out those who are not confident, reducing the burden for subsequent upward movements—this is a classic strategy.
This 'stepping down' action can test the firmness of the lower support, and also open up space for subsequent increases. Pulling back is not turning bearish, but rather to better attack upwards.
04 Practical strategy: Two approaches, targeted remedies.
In the face of a potential 'first step down then pull up' market, how should we respond?
For aggressive players:
Consider testing a short position with a very small size when the price rebounds to the 130-134 USD resistance zone, strictly setting the stop loss above 134 USD. Remember, this is just a test, aimed at catching a pullback and taking profit when possible.
For conservative players:
'Waiting' is the best strategy. Patiently wait for the price to pull back to around the 121 USD support zone, and observe if there are obvious signs of stopping the decline (such as long lower shadows, bullish engulfing patterns, etc.). At that point, you can gradually establish long positions, targeting previous resistance levels.
No matter what strategy you choose, always remember: position management and stop loss settings are your lifeline for survival in the crypto world. Avoid heavy bets when the direction is unclear.
So, don’t panic and go all-in short just because you see a death cross, and don’t rush in blindly just because of good news from a fund establishment. The market often moves in new directions when people hesitate. Currently, about 68% of the circulating supply is staked, which reduces immediate selling pressure and provides intrinsic support for the network. This is like putting a shock absorber on SOL.
The stickier the market is, the more we need to keep our eyes wide open. Feeling a bit lost, unsure about specific points and timing? That's perfectly normal; complex markets require more refined strategies.
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