Solana prices are expected to rise from this level

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

• Solana’s 4-hour market structure was bearish, but the risk ratio was fair.
• The Fibonacci retracement levels helped determine where the bulls would be voided.

Solana [SOL] presented a high-risk buying opportunity for shorter-term traders. The trend and market structure was bearish on the higher timeframes, but analysis of the 4-hour and 1-hour charts showed that an increase in prices was possible.

Read Solana’s [SOL] Price Forecast 2023-24

On June 23 Bitcoin [BTC] managed to reach $31.3k, the highest BTC prices have reached in 2023. The previous local high was $31k in April. This suggested bullish intent, but the price action over the past week suggested that a pullback cannot be ruled out. This made the long setup presented below more risky, and traders should be ready to exit the trade after invalidation.

The short term Solana trend was about to turn bearish

Source: SOL/USDT on TradingView

The 4-hour structure was bearish. After rising to the $17.75 level, SOL formed a higher low at $16.16 on June 23. Since then, the price has dropped to $15.89 on June 27. A series of lower peaks were also recorded.

This showed that SOL has started a downward trend. The Directional Movement Index showed the -DI (red) at 25 and the ADX (yellow) at 19.54. ADX above 20 would indicate a strong bearish trend. Meanwhile, the RSI was also below the neutral 50, indicating downward momentum. The CMF fell but showed significant capital inflows with a reading of +0.06.

A series of Fibonacci retracement levels were plotted based on SOL’s bounce from $12.8 to $17.75. It showed that the 50% retracement level was $15.28, which was a good opportunity to enter long positions, with invalidation below $14.88. Conservatively it appears to be at the level of 61.8% above. In the north, the bearish H4 order block at $18.7 matched the 23.6% extension level at $18.92.

Coinalyze data showed rising demand, but sentiment remained bearish

Source: Coin analysis

On June 26, when the price of Solana fell from $17.1 to $16.08, outstanding interest skyrocketed. The OI gained nearly $20 million, showing massive short-selling and solid bearish sentiment in the market a few days ago.

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Still, the spot CVD is starting to move upwards. Over the past 24 hours, the CVD has risen slightly, while the OI has remained stable despite short-term volatility. Taken together, it showed that market sentiment remained in favor of the sellers.