SOL Technical Analysis Jan 27

Current market structure state – trend intact or shifting?

Market Structure Overview

SOL’s current market structure clearly reflects the downtrend. While the price is trading at the $125.79 level, showing a slight 0.89% increase in the last 24 hours, the overall structure continues the LH/LL (Lower Highs/Lower Lows) pattern. This indicates that the higher highs/higher lows (HH/HL) structure has been broken and bearish momentum dominates. The market continues to stay below EMA20 ($130.93), and the Supertrend signal points to $142.91 resistance as bearish. In MTF (Multi-Timeframe) analysis, a total of 12 strong levels were identified across 1D, 3D, and 1W timeframes: 2S/1S/2S weight on supports, and 3R/3R/3R on resistances. This imbalance strengthens the short-term bearish bias. RSI at 42.92 is in the neutral-bearish zone, with MACD supporting the downside via a negative histogram. No significant news flow, so we’re focusing on pure price action.

Trend Analysis: Uptrend or Downtrend?

Uptrend Signals

For an uptrend, the HH/HL structure must reform. In the current structure, a breakout above the last swing high at $127.4283 (score:68/100) could trigger a bullish BOS (Break of Structure) and open the path to $132.9262 (score:62/100). For stronger HH/HL confirmation, the $171.4009 level (score:65/100) must be surpassed – this points to the major swing high from previous peaks. However, as long as the price remains below EMA20, this scenario stays distant. Short-term recoveries could come from the $124.7050 support, but sustained HH formation requires volume increase and CHoCH (Change of Character).

Downtrend Risk

The downtrend is confirmed with LH/LL: The last swing low at $117.0150 (score:70/100) is lower than the previous low. The price was tested and held near $124.7050 (score:69/100), but LH continues as long as it stays below $127.4283. A bearish breakdown with a close below $124.7050 would extend LH/LL toward $117 and activate the $92.8216 target (score:22/100). With MACD bearish and RSI approaching the 40s, momentum supports the downside. Note: Breaks of these levels strengthen LH/LL as BOS.

Structure Break (BOS) Levels

Main BOS levels are as follows: Bullish BOS – daily close above $127.4283 shifts the structure from LH to HH and targets $132.9262/$171.4009. This gives a CHoCH signal and could initiate a trend reversal. Bearish BOS – close below $124.7050 invalidates $117.0150 and extends the major downtrend. A deeper breakdown leads to $92. These levels align with 61.8-78.6% Fibonacci extensions of swing points. BOS breaks should be confirmed with 1-2 candle validation against false breakouts. Current consolidation within the $123.12-$126.79 range requires waiting for BOS without increased volatility. Detailed charts can be viewed in SOL Spot Analysis and SOL Futures Analysis.

Swing Points and Their Importance

Recent Swing Highs

Last swing high at $127.4283 (score:68/100) acts as local resistance and LH confirmation. This level is critical for BOS: If surpassed, it becomes invalid, questioning the downtrend. The previous one at $132.9262 (score:62/100) is medium-term resistance, while $171.4009 is the major high (score:65/100) – a peak near ATH. These points are reinforced by order blocks and equal highs; retests can create sell opportunities.

Recent Swing Lows

Last swing low at $124.7050 (score:69/100), just below the current price and short-term support. A break targets $117.0150 (score:70/100) – a strong low supported by fair value gaps. These levels protect HL; holds offer bullish divergence opportunities, while breaks extend LL. Swing lows are ideal for stop-loss placement in risk management.

Bitcoin Correlation

SOL is highly correlated with BTC (%0.85+); BTC in downtrend at $88,351, Supertrend bearish. If BTC supports at $86,502/$84,681/$80,600 break, SOL pulls to $117 – amplified downside expected in altcoins. If BTC resistances at $88,258/$91,081 are surpassed, SOL eases and could trigger $127 BOS. Caution for SOL with rising BTC dominance: Current BTC structure LH/LL pressures SOL. If BTC drops below $80,600, SOL $92 target activates.

Structural Outlook and Expectations

Structural outlook is bearish: LH/LL intact, downtrend valid as long as price stays below $127.4283. Bullish invalidation requires $127+ BOS and EMA20 crossover; otherwise, $124.7050 break leads to $117. MTF resistance weight supports short bias. Trade plan: Short at $127, long at $124.70 (tight stop). Market structure is dynamic; follow daily closes. Educational note: HH/HL defines uptrend, LH/LL downtrend – changes via BOS/CHoCH. Be patient, structure first.