Buy the Solana Dip?

After enduring a steep price correction phase lasting more than a month, Solana is currently situated near a pivotal support zone, which was formerly recognized as a resistance level.

This indicates an accumulation of early buy orders from both small and large speculators. If you're considering purchasing Solana, it's crucial to understand the optimal timing and strategies to minimize risk.

Daily time frame analysis

SOLUSD - 1 Day Time Frame

In any market, the presence of equal volumes of buyers and sellers is essential to maintain balance, preventing one side from overwhelming the other. Therefore, the price tends to gravitate towards areas where the largest liquidity volumes are present.

For Solana, the External Sell-Side Liquidity (ESSL)—where stop-loss orders are placed by early buyers—is positioned just below the key support zone, and specifically below the Relatively Equal Lows (REL).

An ideal scenario previously observed in early 2024 involved an initial targeting of ESSL followed by the formation of a support zone. This is exemplified by the Inversion Fair Value Gap (IFVG), where the body of a bullish candle closes above the upper level of a bearish Fair Value Gap.

If this pattern repeats, it presents a favorable buying opportunity for Solana. Investors can place a protective Stop Loss order below the low that preceded the IFVG formation, and set Take Profit orders at both the Internal and External Buy-Side Liquidity levels.

When to buy Solana?

When contemplating a purchase of Solana, it’s important to monitor these specific technical markers that signify strong potential buying points. Understanding these dynamics can significantly reduce the risks associated with entering the market at an unfavorable time.