1. First, let's uncover the truth of being 'rejected' at $212: it's not that it can't rise, but the trapped positions are selling off.
Don't think that SOL's failure to reach $212 means it 'lacks strength'; looking at the on-chain data reveals that this pullback had signals early on.
1. $212 hides the 'old trapped positions', just 1 cent away from triggering a sell-off
$212 is SOL's peak last year; many bought in the $210-$212 range, which later dropped to $176, trapping them for almost 3 months. Now SOL touches $211.99, triggering these trapped positions' 'automatic sell orders'—the chain shows $80 million waiting to sell in the $210-$212 range, just waiting for the price to approach $212 to sell off.
One of my fans in the group, Old Zhang, is one of them; he bought SOL at $211 and has been trapped until now. In the morning, when he saw $211.99, he directly sold: 'Just 1 cent to break even, I'll accept that. After being trapped last year, if I can get out, I'll leave.' There are many people like him, causing the situation of 'not breaking just 1 cent, and directly crashing to $204.'
2. Short-term leverage is too full, a pullback is 'longs killing longs'
More crucially, when it surged to $212 in the morning, many added high leverage—Binance perpetual contract funding rate soared to 0.07%, and long positions above $210 increased by 40% compared to usual. Once the price pulls back, high-leverage longs will be forcibly liquidated, creating a 'longs killing longs' situation: when it drops from $210 to $208, $3 million in long positions get liquidated within 5 minutes, pushing the price down to $204.
A friend who does quantitative trading told me: 'When it surged to $212 in the morning, I reduced my position by half because I saw the leverage was too full. SOL's volatility is high now, and high leverage can easily get washed out, this pullback is actually 'de-leveraging'; it can only rise again after being cleaned up.'
2. Now focus on $202-$204: SOL's 'life and death support zone'; if it holds, there are three waves of targets.
Although it pulled back to $204, SOL's overall bullish trend hasn't broken; the key now is the support zone of $202-$204. If it holds, it's a 'money-giving opportunity':
1. $202-$204 is the 'institutional buying zone', only turn bearish if it breaks.
If SOL stabilizes at $204, it's not a coincidence—on-chain data shows there are $150 million in buy orders in the $202-$204 range, of which 60% are institutional funds (addresses from Circle and overseas funds), which is also why it stopped falling at $204.87, with buy orders directly pulling the price back to $206.
Old player Zheng told me: '$202 is the 20-day EMA support line, also a retest point after last week's breakout. Institutions won't let SOL drop too deep below $202. As long as $202-$204 holds, the bullish pattern remains, and we can aim for $216 and $222.'
2. If the support holds, three target levels are clearly visible.
If SOL holds in the $202-$204 range, the next targets are clear:
TP1: $210 — First, fill the gap from the early morning pullback; this position has little selling pressure and can easily reach;
TP2: $216 — Break previous pressure at $212, opening new space;
TP3: $222 — According to the ascending pattern's target, this is twice the height of the pattern, it can reach as long as there's volume.
I plan to enter some long positions at $205, with a stop-loss set at $200 (if it breaks, I accept the loss), aiming first for $210, and reduce half the position when it touches—this 'buy low + staggered profit-taking' method allows for calm even if it pulls back again.
3. How to operate now? Two strategies, even beginners can remain calm.
After SOL pulls back to $204, it's not 'just buy anywhere', it must respect the support level, especially for those who are trapped by chasing high; don't cut losses randomly:
1. For those who haven't entered: Buy low at $203-$205, give up if it breaks $202.
Entry timing: Pullback to $203-$205, 5-minute chart does not make a new low (does not drop below $203), enter with a light position, don't exceed 5% (with $10,000 principal, invest a maximum of $500);
Stop-loss setting: $200 (this is the last safety line; if broken, it indicates institutions are exiting, just give up);
Target points: first aim for $210 (reduce 30% of the position), then look for $216 (reduce 50% of the position), and the remainder at $222.
Old Zheng entered at $205 with $200 yesterday, he said: 'Now buying low is safer than chasing high, $203-$205 is the institutional buy zone, even if there's a short-term pullback, it won't drop much.'
2. For those trapped by chasing highs: $202 is the 'stop-loss line', don't hold positions.
For those trapped above $210: set a stop-loss at $202, if it drops to $202 and doesn't rebound, reduce half the position; don't wait until it falls to $198 and gets deeply trapped.
For those trapped at $206-$210: don't panic; $204 is already support. Wait for a rebound to $210 to reduce positions, minimize losses as much as possible.
Things not to do: Don't cut losses at $204, it's a support level, cutting now could mean selling at the floor.
A fan in my group chased $500 at $210, now facing a loss of $6; I told him to set a stop-loss at $202. He said: 'Luckily I didn't cut, now rebounding to $206, I'll sell at $210.'
Lastly, one reminder: don't go against the support level; if it breaks, accept defeat.
Although SOL is overall bullish, don't be complacent—if it really breaks $202 and the volume increases (1-hour trading volume exceeds $300 million), decisively turn bearish, aiming for $198, don't go against the trend.
In the crypto circle, 'if the support holds, it's bullish; if it breaks, it's bearish' is a hard rule. Don't hold positions just because you 'think it will rebound'. Last year, when SOL broke below $200, some held onto it until it hit $176, losing 12% before cutting losses, which was not worth it.
If you're in the crypto space, without a good circle or first-hand information, then follow Old Luo to get more experience and genuine operational insights every day.
