Solana is one of the coins I will start a spot DCA strategy for. We laid out the general strategy in our Bitcoin August prediction blog last week, so today we zoom in on SOL. On top of the Solana DCA plan, I’ll also share a live scalp trade I’m watching right now.
Before we dive in, a quick confession. We’ve published a lot of content lately, and I sadly missed posting a blog on my $HYPE trade. However, I did share it on X. Not the exact trade, but the alert that I was going to long it. For the active followers, I hope you caught it with me, because we’re up 90% on that one thanks to the leverage.
Let’s make sure you don’t miss the next one. This Solana setup is forming as we speak.
Macro and Solana Developments
First, the bigger picture. Bitcoin has spent the entire week pinned around $63,000–$65,000, moving barely half a percent. Meanwhile, SOL trades near $74, still down roughly 7% over the past month. The majors are quiet, and that’s usually when positioning happens.
Under the surface, Solana has real catalysts stacking up:
Morgan Stanley entered the SOL ETF race. Their spot Solana ETF (MSOL) launched July 28 and pulled in $19 million on its second trading day. That was the biggest single-day inflow across all US SOL ETF products since May. The fund charges just 0.14% and passes 95% of staking rewards to shareholders. Cumulative SOL ETF inflows now sit above $1.1 billion.
Tokenomics are turning deflationary-ish. Governance proposals that went to a vote on August 3 aim to increase daily SOL burns more than tenfold, while speeding up the inflation reduction schedule. Less new supply, more burned supply. You know how that math works.
The tech keeps shipping. The Agave v4.2 client activates on mainnet the week of August 17. It halves slot times to 200ms, triples maximum transaction size, and cuts on-chain storage rent by 90%. The bigger Alpenglow consensus overhaul, targeting ~150ms finality, follows later in Q3.
Adoption isn’t slowing down either. The Solana Foundation signed an MOU to bring Solana Pay to 330,000 Korean merchants processing around $4 billion monthly.
So, we have institutional inflows, supply reduction, and protocol upgrades. Fundamentals look solid. The chart, however, still needs to prove itself. That brings me to the trade.
My Solana Scalp Trade Setup
Okay, this would be my trade setup. Fair warning: it’s a risky one, so it will need close monitoring. This is not a “set and forget” position.
On the 4h chart, SOL gives off some bull flag vibes. Price sold off hard from the $98 area, bounced from the June low, and is now grinding down in a tight descending channel right on top of my buy zone. These flags resolve violently, in either direction. That’s exactly why the entry conditions matter.
The setup:
- Entry: $72.25 — but only if we hold that level. I want to see orderflow confirmation before committing. No confirmation, no trade.
- Stop loss: $70.50 — below the last significant low. If we lose that low, the flag thesis is dead and I’m out. No hoping, no averaging down on a leveraged position. New to reading these levels? Start with our support and resistance beginner guide.
- TP1: $73.25 — take 10% off
- TP2: $74.80 — take 15% off
- TP3: $77.40 — take 15% off
- Full TP: $87.60 — the final 60% rides to the top of the range
Once TP1 hits, I aggressively trail my stop, or move it straight to break-even. From that point, the trade can’t hurt me anymore. That’s the entire philosophy behind scalping these swings: cut the downside fast, let the last portion run.
Risking $1.75 per SOL for a potential $15+ move to the final target gives this trade an excellent risk-to-reward on paper. Because we take partials along the way, the realized R/R lands lower than the headline number. I’m fine with that trade-off. Partials pay the bills; runners make the year.
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Q3 Outlook: Lower Prices, More Scalps
Let me be clear about the bigger picture. We do expect a lower period coming in Q3. We discussed the reasoning in our Bitcoin blog of last week, and nothing has changed my mind since.
That expectation doesn’t mean we can’t trade the swings in between. Markets never move in a straight line down. I consider all of these scalps: quick in, quick out, tight invalidation. The long-term accumulation happens through a completely different strategy.
Speaking of which.
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My Solana DCA Plan
The DCA buying strategy is starting soon! My Solana DCA follows the same timely structure as the Bitcoin plan: two buys per week, running from mid-August through early November. Same schedule, same discipline, no emotions involved. If the concept is new to you, our full DCA strategy guide explains why this approach beats emotional buying.
Why Solana? Simple. After the DCA finishes, SOL will be my third biggest holding, behind BTC and HYPE. For the rest of my plan and the alts I’m buying, check the crypto bottom buying list.
Price-wise, my Solana DCA orders sit between $54 and $28. Orders are set already.
Now, before you spit out your coffee: I’m not saying I believe we go as low as $28. However, I want to have an order in place in case we do get one final “sell-off” wick in crypto. Those capitulation wicks last minutes, sometimes seconds. You don’t catch them by reacting. You catch them by having limit orders waiting months in advance. To recognize what these market bottoms look like on a chart, read our guide on bottom patterns explained.
One more rule I set for myself: if by mid-October we’re not close to my bottom targets, I’ll add that unused budget to the timely DCA instead. Either way, the money goes to work.
Final Words
Solana gives us two plays at once right now. Short term, a risky scalp with a clear invalidation at $70.50 and a defined path up to $87.60. Long term, a Solana DCA that starts soon and turns SOL into a top-three holding for me.
Notice how the two never mix. The scalp has a stop loss and gets cut without mercy. The DCA has no stop loss at all, because it’s designed to buy weakness. Confusing the two strategies is how traders turn a losing scalp into an “accidental long-term investment.” Don’t be that trader.
Want to sharpen your own setups instead of copying mine? Increase your trading edge by studying our 31-part trading fundamentals series. It covers everything from chart reading to invalidation, step by step.
I’ll post updates on the trade as it plays out. If SOL confirms $72.25, you’ll hear from me.
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FAQ
What is a Solana DCA strategy? DCA (dollar-cost averaging) means buying a fixed amount of SOL on a fixed schedule, regardless of price. My timely Solana DCA runs two buys per week from mid-August through early November. Additionally, I placed price-based limit orders between $54 and $28.
Do you really think Solana drops to $28? Not as a base case. The $28 order exists purely to catch a potential capitulation wick, one final violent sell-off that reverses quickly. If we never get close by mid-October, that budget moves into the timely DCA instead.
What invalidates the scalp trade? Losing $70.50, the last significant low. Below that level, the bull flag structure breaks down and I close the position immediately. A scalp without invalidation is just gambling.
Why take partial profits instead of holding for the full target? Partials lock in gains and let me move my stop to break-even after TP1. From there, the worst case is a small win. The remaining 60% of the position keeps the upside alive toward $87.60.
Morten Christensen
Crypto class of ’13, airdrop farmer since 2016. Avid trader and DeFi veteran. His market commentary has been featured by Bloomberg, The Wall Street Journal, The New York Times, Forbes, and CNN.
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