SOL Price Action: Rejection at Key Internal Liquidity ZoneGreetings, traders and crypto enthusiasts! Lord MEDZ back again with a detailed analysis on Solana (SOL), a top performer in the crypto market that’s currently facing some significant price action. Based on my observations, using daily and lower timeframes, SOL has revisited a key internal liquidity zone (ITL) and has rejected sharply at the 50% mark of an imbalance left by a previous drop. Let’s break this down and explore what could come next for SOL’s price action.
Revisiting the Internal Liquidity Zone (ITL)
In this particular case, the ITL is a zone where price previously dropped rapidly, leaving behind an imbalance in the market. This imbalance means there was an overwhelming amount of selling, with very little buying, which caused the price to move quickly downward. As a result, a sell-side liquidity zone was created, along with a buy-side imbalance that the market would eventually need to fill.
Here’s what happened:
During the rapid drop, sell orders dominated the order book, creating an imbalance between sellers and buyers. This imbalance left a gap in price where little buying had taken place, which is a magnet for future price action.
As price retraced, it tapped back into this ITL and tested the 50% mark of the gap, which is often a key area of interest for both buyers and sellers. This level represents the halfway point of the imbalance and is a common target in price action trading as market participants look to either take profit or place new trades.
Price Rejection at $52: The 50% Mark of the Gap
SOL’s price action recently revisited this ITL and rejected sharply at around the $52 level, which corresponds to the 50% mark of the imbalance zone. Here’s why this is important:
Imbalance Filling: In market structure, gaps and imbalances are often filled or partially filled over time. In this case, the market retraced and tapped into the 50% zone of the sell-side imbalance, but it failed to break through, suggesting that selling pressure is still strong at this level.
Sell-Side Liquidity Dominance: The rejection at $52 indicates that sellers are defending this level, and there isn’t enough buying strength to push price higher. This is a sign that the market could be preparing for a move lower, especially as it seeks to target external liquidity zones.
Potential Targets: External Liquidity Zones at $110 and $104
With the rejection at the internal liquidity zone at $52, my attention is now on the external liquidity zones below. Based on the current market structure and order flow, the next key levels to watch are $110 and $104.
External Liquidity Zone at $110: This is the first major point of interest (POI) for sell-side liquidity, marked by equal lows. If price continues its bearish trend, we could see a sweep of liquidity around this level as sellers continue to dominate the market.
External Liquidity Zone at $104: The next target would be $104, which represents another significant liquidity area where buy orders may be resting. This level is another POI, and price is likely to react here before determining its next direction.
What Could Happen Next?
Given the rejection at $52, it appears that SOL is preparing for a further move down toward these external liquidity zones. Here’s what I’m watching for:
Continued Bearish Order Flow: If sell-side liquidity continues to dominate, we could see SOL make its way toward $110 and $104, where liquidity is likely resting. These levels represent areas where the market may look to rebalance the price after such a sharp rejection.
Break and Retest: If price manages to break below these external liquidity zones, we could see a further bearish move, potentially toward deeper support levels. However, if buyers step in at $110 or $104, we could see a bullish reaction and possibly another attempt to revisit the $52 level.
Final Thoughts: Watching the Liquidity Zones
Solana’s price action is currently focused around liquidity zones, and the recent rejection at $52 suggests that the market is gearing up for a move toward lower liquidity. These liquidity zones provide crucial information about where price is likely to react, and traders should pay close attention to how price behaves around $110 and $104.
As always, this analysis is based on the flow of orders and market imbalances, without the use of traditional indicators. If you’re watching SOL closely, keep an eye on how price interacts with these liquidity zones—it could signal the next big move.
Stay sharp, stay informed, and remember to trade wisely.
Peace, Lord MEDZ.
Disclaimer: This blog is for educational purposes only and should not be considered financial advice. Always do your own research or consult a financial professional before making any trading decisions.
