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- The bulls failed to secure the $26.85 breakout level.
- Open interest rates fell and more long positions went down.
from Solana [SOL] pullback extended ahead of Fed interest rate decision on July 25/26. Following Ripple Labs’ legal victory, SOL graced a new 2023 high of $32. However, the party went by quickly after that and SOL reclaimed some of the gains amid a pullback.
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Will the 50% Fib Stop Sellers?
Source: SOL/USDT on TradingView
Fibonacci retracement levels (yellow) were plotted between the recent high of $32 and the mid-June swing low of $12.8. At the time of writing, Solana price action had retreated to the $24 level. Based on the Fib tool, the 50% Fib level at $22.5 was the next major support level after the $24.
In addition, the 50% Fib level also coincided with the June highs; therefore bulls are expected to defend defenses in the area if the retreat is lower. If the decline eases into the $22.5 – $24 area, bulls can target again at $30, but they will have to get around the $26.5 hurdle to move forward.
But the drop below the 50% Fib level will further weaken SOL’s market. Such extended bearish overdrive could lead SOL to retest the $20 psychological barrier, especially if BTC takes huge losses after the Fed decision.
Meanwhile, the Relative Strength Index and On Balance Volume fell lower, suggesting a decline in buying pressure and demand over the past few days.
Open interest also fell
Source: Coinglass
Falling Open Interest (OI) rates further confirmed the bearish grip. SOL’s OI is moving south after peaking in mid-July.
How many Worth 1,10,100 SOL today?
Between mid-July and the time of writing, SOL’s OI fell from >$400 million to less than $350 million, highlighting declining demand for SOL in the futures market prior to the Fed decision.
So there could be a further pullback, and the $24 could break, forcing the bulls to regroup at the June high and the 50% Fib level of $22.5.