- Solana’s market structure recently reacted to key supply zones, but liquidity sweeps played a pivotal role in its movements
- The price faces two possible paths: rising from demand zones or reacting to overhead supply for a bearish continuation
- Understanding liquidity dynamics is essential—if you can’t spot it, you might become it!
In our previous analysis of Solana, we observed a bearish market structure on higher timeframes. True to the projection, the price respected a supply zone we identified and moved downward.
However, as with any market, there were twists.
What Happened?
Initially, Solana showed a minor reaction to the first supply zone but triggered a stronger reaction at the second.
Despite this, the price didn’t continue downward as expected. Why? It first needed to sweep the liquidity above—a classic move that reinforces the importance of understanding liquidity dynamics.
Here’s the key takeaway: If you don’t recognize liquidity zones, you might inadvertently become liquidity yourself.
What’s Next for Solana?
Looking ahead, the price has two possible trajectories:
Solana might respect a nearby demand zone and continue its ascent, targeting liquidity below.
Alternatively, it could reverse course, reacting to overhead supply zones before resuming its bearish trend.
As always, the market is unpredictable, and no scenario is guaranteed. The best we can do is stay prepared and adapt as new data emerges.
Final Thoughts
Understanding liquidity is critical in predicting Solana’s movements. It’s not just about identifying zones; it’s about anticipating where the price might go to “hunt” liquidity before making its next big move.
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