SOL Momentum Breakout

## SOL Momentum Breakout — Full Methodology

### Breakout Detection

1. **14-day high breakout:** SOL closes above the highest close of the last 14 days

2. **Volume spike:** 24-hour volume must be ≥ 2× the 14-day average volume

3. **Momentum filter:** RSI(14) must be between 55 and 80 (strong momentum, room to run)

### Entry Criteria

1. Price closes above the 14-day high

2. Volume confirmation is present (≥ 2× average)

3. SOL/BTC ratio must be flat or rising (SOL outperforming or keeping pace with BTC)

4. Enter at the daily close

### Exit Rules

- **Trailing stop:** 15% below the highest close (wide stop for crypto volatility)

- **Momentum exhaustion:** Exit if RSI(14) exceeds 85 (parabolic move — take profit)

- **Volume dry-up:** Exit if 3-day average volume drops below 50% of the entry-day volume

- **Time stop:** Reassess after 21 days

### Position Sizing

- Risk 0.5–1% of portfolio per trade

- SOL is highly volatile — position sizes should be 50% of what you'd use for BTC/ETH

- Max allocation: 5% of portfolio

### Best Market Conditions

Works best during "altcoin season" when capital rotates from BTC to Layer-1 competitors. SOL benefits from DeFi TVL growth, NFT activity on Solana, and meme coin speculation. Underperforms during BTC dominance surges and crypto winters.

### Backtest Notes

Tested on SOL/USD daily bars from Jan 2021 to Dec 2024. SOL's massive rally in late 2023 and 2024 produced outsized returns. The 2022 FTX collapse drawdown was partially avoided by the momentum filter. High CAGR comes with high volatility.