Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- SOL bears maintained control over price resistance zones.
- Fluctuating market demand could hamper a bullish rally.
Solana [SOL] suffered more than 6% losses in the past seven days. The price rejected at the $23 resistance level and traded at $20.7 as of writing.
Read Solana’s [SOL] Price Forecast 2023-24
With Bitcoin [BTC] struggling to hold onto $28k, bears may be tempted to go for more dips. However, bulls could rise if the price hovered above a critical support level.
Will the $20.5 support level hold again?
Source: SOL/USDT on trade view
SOL has been trading between the $20.5 – $25.5 region for over a month. The bearish order block just below the $25.5 resistance heralded a price dip that pushed prices towards the $20.5 support level. However, a quick bounce from the support level was again rejected at the $23 level.
The Visible Range Volume Profile provided insight into what the next step of SOL could look like. The Value Area High (VAH) stood at $23.5 while the Value Area Low (VAL) stood at $20.4. The VAL also came along with a critical resistance level and a bullish order block. This suggested that the price could rise again from the $20.5 support level, with buyers historically prioritizing this support level.
The Relative Strength Index (RSI) was just above the oversold zone at 35.02. This suggested that selling pressure could ease as it went to press. The OBV also registered a slight increase to boost buyer confidence.
Alternatively, sellers can look forward to a four-hour close below the support level, invalidating a bullish pullback. This could lead SOL to retest the March lows of $18.85.
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Market sentiment dampened buyer expectations
Source: Coinglass
Short-term trading activity in the futures market tended towards bearish sentiment. Dates from Mint glass showed that long positions worth $4.82 million were liquidated in the past three days. This represented 86.6% of total liquidations within that period.
The financing percentages also fluctuated between negative and positive. This indicated a faltering demand for Solana. However, a strong bullish advance of BTC at $30,000 could accelerate SOL’s bullish rally.
Source: Coin analysis