Journalist
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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The trends in the upper and lower timeframes of Solana prices appeared to be at odds, indicating that a bullish reversal could occur soon
- The lack of sales volume recently meant the decline could be superficial
Solanas [SOL] network recently saw a significant increase in social media engagement. Much of this can be attributed to the Jito [JTO] air drop. As a result, DEX volume on Solana’s network also saw a huge increase.
Solana’s NFT sales also surged higher last week. In fact, AMBCrypto’s recent report also noted an increase in network activity, with the Solana blockchain ranking #1 for total transactions in November. Despite these developments, the token recently saw a pullback on the price front.
Last November’s outbreak could be completely traced
Source: SOL/USDT on TradingView
A range where Solana traded for most of November was highlighted in yellow. It rose from $51.1 to $64. On December 7, SOL broke past the range highs to reach $77.78. Unfortunately, it has declined since then.
The RSI fell below the neutral 50, indicating a shift in momentum in favor of the bears, and the On-Balance Volume (OBV) has also been on a downward trend over the past three days. This suggested that sales volume was stronger. Volatility on Monday rose to $64.18 on the 2-hour chart, which saw a quick rebound.
And yet the two-hour time frame indicated a bearish market structure. The move below the recent higher low at $70 (orange) marked this structural shift. The Fibonacci retracement levels (cyan), plotted based on the rally from the range highs, indicated that $63.11 and $66.24 could be levels where a bullish reversal could occur.
The drop in Open Interest eased the feelings of market participants
Source: Coinalyse
Over the last two trading days, Solana’s price slowly dropped from $7.78 to $70. This was accompanied by a decline in Open Interest (OI). The conclusion from the decline in OI and prices is that market participants are losing their bullishness.
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Surprisingly, spot CVD has moved higher. This is a sign of healthy demand for the token in the spot markets, even if near-term sentiment has been bearish. Therefore, the recent decline could be temporary and superficial. On the higher time frame charts, the $60-$65 zone represents a support zone where bulls could initiate a recovery.
