You need to pay attention to the bigger coins first so you can get a bit of a “heads up” as to what can happen in places like this.

Solana bounced a bit on Monday as value hunters came in to pick up the coin. That being said, we are also in the midst of forming a massive descending triangle, just as we are in the Ripple market and so many others. What this tells me is that we are more likely than not to get a continued breakdown, which makes quite a bit of sense considering all of the problems with the Solana network.

At this point, I think it’s safe to say that we are essentially entering “crypto winter”, and as a result, all moves will take their cues from Bitcoin and Ethereum. Don’t believe me? Go look at the Bitcoin chart, because it looks almost identical to this one. It’s not until Bitcoin can pick up traction that Ethereum can. Once Ethereum picks up a bit of traction, then you can start talking about other coins such as Solana.

If you are a big believer in the Solana project over the longer term, you will more likely than not be better served waiting for the markets to complete breaking down. There’s nothing on this chart that suggests that we are done, and as a result, I think it is probably only a matter of time before we see traders come back in and start selling this market again. The 50-day EMA is sitting just above the crucial $60 level and is sloping lower. In fact, if I were to come up with a screenshot of a chart that shows a perfect downtrend, I could use this one.

I would anticipate that the $30 level could cause a little bit of support, but ultimately, we are going to blow through that rather easily. At this point, Solana would have to gain almost 50% to reach the 50-day EMA, something that does not look likely to happen anytime soon. In fact, the later we got into the day on Monday, the more the gains we gave back. At this point, I think a lot of the hype around crypto is starting to come off again, so we probably have several months, if not a few years to start thinking about building longer-term positions again. Again, you need to pay attention to the bigger coins first so you can get a bit of a “heads up” as to what can happen in places like this.

I would be very cautious between now and closing on Wednesday.

The S&P 500 rallied a bit on Tuesday to continue the upward pressure from the Monday low. As we have bounced this way, it does suggest that it is probably only a matter of time before we go higher, but it is very likely that the market will continue to focus on the Federal Reserve, and not anything else. After all, the Federal Reserve is the only thing that the stock market cares about right now, and with the FOMC meeting ending on Wednesday, it is very likely that we will continue to see a lot of volatility afterward.

After all, we will not only have an interest rate high, but we will also have the statement and press conference afterward that traders will be paying close attention to. Because of this, traders are trying to figure out just how hawkish the Fed will be, perhaps sending the market spiraling lower. If we were to see the Federal Reserve sound extraordinarily hawkish, that could be enough to kick the market down below the lows on Monday. It is worth noting that at the end of the day on Tuesday, we did start to see a little bit of selling pressure, so it shows just how tenuous this position is.

I believe at the end of the day on Wednesday we should have a lot more clarity as to where the markets are about to go, so pay close attention to where we close. The size of the candlestick shows that there is less than strong enthusiasm, so I think it is probably more likely than not that we will continue to see a lot of back and forth between now and the Fed statement/press conference.

On the upside, I see the 4300 level as a major barrier that will be difficult to overcome. It is not until we break above the level on a daily close that I think we can get truly bullish. In the short term, is very likely that we go back and forth, but again, if we were to break down below the hammer from the Monday session, then it is likely that we could go down to the 4000 handle, perhaps even lower than that. I would be very cautious between now and closing on Wednesday.

Ultimately, it looks as if we are trying to go higher, but there is a lot of work to do.

Bitcoin has rallied a bit during the trading session on Tuesday to reach the $41,250 level. If we can break above here, then the market is likely to go looking to reach the 50 Day EMA, which is at the $42,500 level. A break above that then allows the market to go looking to the 200 Day EMA, which is currently at the $42,000 area. Keep in mind that Bitcoin is highly technical, so it is likely that we will continue to see plenty of buyers based on what we have seen as of late.

The hammer from the trading session on Monday suggests that we are going to continue to see plenty of buyers near the $40,000 level, and this makes a certain amount of sense considering that it is a large, round, psychologically significant figure, and an area where we have seen action previously. However, over the last several months we have seen this market sliced back and forth through that level, so it does make a certain amount of sense that we would see the $40,000 level lose some of its efficacy.

The hammer from the Monday session is rather impressive, and I think that is a bit of a gateway to the uptrend. If we were to break down below the bottom of that hammer, then I think it allows Bitcoin to go down to the $37,500 level, perhaps even down to the $35,000 level underneath that had also been rather supportive. I do believe at this point the market is likely to see a lot of pressure to the upside, but if we were to break down below there, it could open up the possibility of a “crypto winter”, which is when crypto does almost nothing for the longer term.

I do believe that given enough time the Bitcoin market is trying to form its basing pattern, and therefore I think that it is going to be very noisy and choppy, but the market is going to continue to see a lot of noisy behavior. Remember that Bitcoin is far out on the risk spectrum, and therefore we need to see more of a “risk-on world” to make the Bitcoin market really take off to the upside. Ultimately, it looks as if we are trying to go higher, but there is a lot of work to do.