Overview
On the weekly timeframe, 
SOLUSD has continued to print higher highs. However, the DMI Delta indicator is signaling lower highs, creating a notable bearish divergence. Meanwhile, price action is tapping into a significant demand zone but has yet to break decisively through it.
Why This Matters
– Bearish Divergence: When price moves higher but a momentum indicator lags or makes lower highs, it can indicate weakening bullish pressure. This often precedes corrections or trend reversals.
– Demand Zone Confirmation: Despite the divergence, SOLUSD is currently interacting with a recognized demand zone. If buyers step in here, we could see a bounce. However, if this zone fails, it could signal a more substantial downturn.
Key Considerations
- Monitor the Demand Zone: A clear breach or strong bounce will shape the next directional move.
- Validate Signals: While divergence suggests caution, confirm using volume or other momentum indicators.
- Risk Management: Utilize stop-loss orders below the demand zone if you’re taking a long position.
- Potential Reversal: A confirmed break below support could open downside targets, so remain vigilant.
“Bearish divergences are early warnings—combine them with clear support/resistance levels to form a complete trading plan.”
Conclusion
The interaction between the bearish divergence and the current demand zone should be closely monitored. If buyers fail to hold this level, traders may look for short setups or hedge existing positions. Conversely, a successful defense of the zone, coupled with increased buying volume, could invalidate the bearish scenario and offer short-term bullish opportunities.
Disclaimer: The information provided is for educational purposes only and does not constitute financial advice. Always conduct your own research and manage risk appropriately.