17.12.22
Today’s trading spotlight deals with the cryptocurrency Solana. It had a big breakdown recently following the bankruptcy of CEX FTX, where it plunged from $30 - $35ish all the way down to about $7.50. Since then it bounced a bit and consolidated in the $12 - $16 area. I am now looking for a Short play on this one, as BTC had a slight dump and SOL seems likely to follow and already started to.
In the daily chart below you can see the price history of Solana and see its bigger dump with four big red candles in a row. In the image below you can also see the short term resistance marked by the red line that Solana could not break to the upside.
This resistance line is also marked in the hourly image below. Solana stagnated at these price levels and reversed its direction. In the hourly chart you can also see a blue box, which marks the low after the FTX bankruptcy. This will eventually be the target area for the Short trade idea.
So the resistance line from above will not be the risk level in this case, as this idea is a more shorter term trade, looking for a faster dump. If you would like to give it more room, you can also take the $14.50ish resistance line as risk level.
The 15 minute chart below shows my ideal risk level, which is a very tight area, but serves to minimize risk and try to maximize profit. So my idea is to get entries in the $12.30 - $12.50 range, use the red line in the image below as a risk level and look for a target price of $7 - $8 which is marked by the blue box in the image above.
I hope this helps you to get an idea of my trade plan.
TLDR
Go for a Short on Solana with a very tight risk level of $0.20 - $0.30 cents risking $12.50 and look for dumps below $10 up to $7 - $8.
I hope this helps you to get an idea for a possible trade on this one.
Have a great day!
Niklas
This is not financial advice, it is for educational purposes only!
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