Take a look at $SOL . The shorts have made a killing, but chasing them now would be asking to get wrecked.
Look at the actual data: 1,049 shorts are crushing 421 longs. The shorts' average entry is 95.9, and they're up more than 26 million U; the longs' average entry is 101, and they're stubbornly holding on to a 16 million loss. Short positions are extremely crowded, with huge profits.
Look at the chart: the daily and 4-hour charts are clearly in a downtrend, but on the 1-hour chart, the RSI has fallen to 28—severely oversold. The current price of 89.9 is far below the shorts' cost basis of 95.9. If the shorts simply take profit, the market manipulators could easily drive the price up with a quick spike and wipe out everyone chasing the downtrend.
Safest move: don't chase the short. Wait for a rebound!
Wait for a bounce to around 94–95.5 (the shorts' cost zone and moving-average resistance), then enter short in stages. Set your stop at 97 and target a retest of the previous low at 88. $SOL
Look at the actual data: 1,049 shorts are crushing 421 longs. The shorts' average entry is 95.9, and they're up more than 26 million U; the longs' average entry is 101, and they're stubbornly holding on to a 16 million loss. Short positions are extremely crowded, with huge profits.
Look at the chart: the daily and 4-hour charts are clearly in a downtrend, but on the 1-hour chart, the RSI has fallen to 28—severely oversold. The current price of 89.9 is far below the shorts' cost basis of 95.9. If the shorts simply take profit, the market manipulators could easily drive the price up with a quick spike and wipe out everyone chasing the downtrend.
Safest move: don't chase the short. Wait for a rebound!
Wait for a bounce to around 94–95.5 (the shorts' cost zone and moving-average resistance), then enter short in stages. Set your stop at 97 and target a retest of the previous low at 88. $SOL