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Welcome to "The Alpha Insight", your go-to source for all things NFT trading and investing on Solana! In this mid-week edition, I will be going over some examples in detail of the topic in question: Support & Resistance. I will be taking 5 projects and showing you how each chart can be interpreted by support and resistance levels and what I would be looking for if I was going to enter or exit a trade.
(Download and view in PDF format for a better reading experience)
DeGods have been flying high since breaking the 100 Sol mark many months ago. Strong support was created at 167 Sol a very long time ago which was retested in the November flash crash.
The next resistances were at 340, 400 and 590. Currently, the price has broken through the 340 resistance quite conformably from the flash crash support bounce. We are range-riding between two levels. The price is currently sitting on the next resistance level looking to make a move upwards.
After this level breaks, it is clear air all the way up to the next resistance of 590. In my opinion, the last time DeGods went up that high was when y00ts was minting and the hype propelled them. As a psychological number, 500 will see some resistance. Humans subconsciously have numbers that mean something, usually, lots of 10's and 5's are resistance or support levels.
If DeGods continues its momentum I see a possible retrace back to 340 with a break of the 400 resistance until 500. Followed by a retrace from 500-400 to test that 400 is now supported before moving higher again to the ATH resistance level.
SAC has had a fall from grace. Back early in the year, SAC was the PFP to have on Twitter. The tokenomics have failed them and the price reflected this. The first support was retested in the fall and confirmed a solid bottom at 18 Sol. This will probably be the definitive bottom unless something outrageous happens.
The price has fluctuated and I've drawn out every support/resistance level made on the way up. Since the bottom, SAC has tested that 50 Sol resistance level and failed and dropped back down to the 18 Sol floor support. Currently, in accumulation mode, I am expected SAC to stagnate around this level for a short while or maybe dip down to that 18 levels again. If we do see a dip down I will be looking to accumulate... A solid project with a great foundation should not fail in our ecosystem.
BLXCKOUT is a smaller project but a true builders project. I've been watching these from way back when they were at 0.2 Sol. They followed the same pattern on the way up. Range riding in the accumulation zone before making a move up. At first, it was 0.2 to 0.5. Then 0.5 to 1, 1 to 2 and so on. Right now they are range-riding between strong support and strong resistance. 4.3 and 4.8 to be exact.
They have been holding this level for a short while and I expect a breakout soon. I am looking to accumulate near as 4 Sol as I possibly can. Once they break out they have not sustained a price this high so the next resistance could be 6+.
A small bit of alpha for anyone reading. BLXCKOUT secured a big $2.5 million pre-seed VC funding recently. The devs have quit their web2 jobs and working full-time on web3. 4 Sol for a project like this is a steal in my opinion. (Not financial advice)
Plato is a newer project with less history. This is a great example of how to chart a fresh project without a track record of historic support and resistance levels and something I personally learnt from.
I thought the bottom support was the 1.7 mark and called it early. But the price kept falling till it hit a definitive bottom of 1.2 Sol and has been edging sideways since. The mistake I made, which in hindsight is obvious, is that the price action of the first level was not the expected action of a bottom price.
A strong downtrend has formed with no bounces. Once the 1.2 mark was hit there was a small bounce as the price plateaued out and hovered close to this level.
If you imagine throwing a bouncy ball, the first bounce after the hit will be a big bounce, over time the bounce gets smaller and smaller until it is not bouncing. The same happens to price action, if something falls from a high price it will bounce on the way down until it hits the rock bottom where the bounce is no more. This is what this chart looks like!
JellyDawgs has a good history of price but is still fairly new. As a Gen2 collection, it will always be tethered to Gen1 in some respects. There have been several levels created as the price has gone up and down. Right now we are stuck between 3.2 and 2.5 with an intermediate level of 2.9. This is a great accumulation zone forming.
Once the 3.2 mark is broken the price should continue to 3.7 before retracing back down to 3.2 to test this broken resistance as support. After that 5 Sol is a phycological level and quite commonly a resistance level.
Summary
I hope you have learned something from this short newsletter. It gives a range of examples of how to see support and resistance levels and what I expect to happen going forwards.
I have written each example as a continuation of the skills, detailed to begin and then tapering off with each example to let you fill in some of the blanks and build a vision for yourself.
As you can see patterns do form on any chart from a big blue chip to a lower, new project. You can trade these trends if you time it right. At the moment the market is still in a bearish sentiment and until the overall macro FUD clears we will be suppressed. But when the bull market returns charting will be crucial.
Thank you for this awesome content, learning so much, please do keep it up, getting ready for the next BULL now!
Just wait until the next issue, really start getting into the best indicators!
Excellent analysis!!!