I just noticed an interesting point on the SOL chart — the price is now 84.28 with a 0.15% increase over the hour. This is a good example for discussing how to properly work with pullbacks in the market.

You see, many traders confuse a simple pullback with a full trend reversal, and because of that, they close profitable positions too early. I’ve fallen for this mistake myself before.

Look, a pullback is just a temporary price movement against the main trend. If the trend is upward, a pullback will be a decline. If the trend is downward, a pullback will be a rise. But the key word here is "temporary." It’s not a reversal; it’s just a "breather" before continuing.

You can distinguish a pullback from a reversal by several signs. During a pullback, trading volume usually decreases — this is an important signal. A reversal, on the other hand, is often accompanied by a sharp spike in volume when the opposite side enters strongly. Additionally, during a pullback, the price does not break key trend structures — for example, in an uptrend, the higher lows remain intact.

In practice, I look for several things at once. First, the price should return to a strong support or resistance zone. Second, I check RSI and MACD — there should be divergences, but not sharp ones. Third, I wait for confirmation from the candles themselves — a reversal candle, pin bar, or engulfing pattern.

Working with Fibonacci levels is very helpful. Pullbacks often occur at levels 38.2%, 50%, or 61.8% of the previous move. It’s not magic, just market psychology — traders place orders there.

If the trend is clear, a pullback usually returns to the MA20 or MA50, then moves again in the trend’s direction. This is a classic pattern I see constantly.

The most common mistake is entering a trade too early, when the pullback isn’t finished yet. The result is a stop loss triggered in vain. The second is confusing a pullback with a reversal and exiting the position when you should have held.

Tip: always check the pullback on multiple timeframes. If you see a pullback on the hourly chart, but the 4-hour trend is still strong — that’s a good signal that the pullback is truly temporary.

A pullback is your friend in a trend if you know how to use it. "Buy on the dip" in an uptrend or "sell on the rally" in a downtrend — that’s the essence. The main thing is not to confuse it with a reversal and always manage your risks. These are the kinds of moments I monitor on Gate, where it’s convenient to analyze all these movements.