- Solana is likely to trade within a certain range over the next two weeks
- The indicators were bullish, but one chart showed that the price could soon drop to $165
Solana [SOL] has seen significant volatility over the past five days. The altcoin rose from $167 to $185, making most of these gains in one day, on Sunday, July 21. The company has since recorded these gains in the charts.
Its increased volatility may be related to Ethereum [ETH] spot ETF approval and trading that began on July 23. Pre-event speculation that SOL would be next led to positive sentiment and profits, even if their collective impact did not last long.
Bulls could defend the lows in the range
Source: SOL/USDT on TradingView
The RSI was above the neutral 50 to reflect the bullish sentiment. The OBV rose slowly in July, and this trend has not stopped despite the recent pullback. The CMF was above +0.05, indicating steady, notable buying pressure.
These are the signals swing traders can expect when range lows need to be defended.
However, development activity has declined since June. The metric’s value of 24.62 was below Ethereum’s 44.95 and Cardano’s. [ADA] 77.83 reading. On the contrary, weighted sentiment jumped into positive territory.
Combined with the technical findings, the numbers suggested sentiment has increased. A rise in SOL’s social dominance would further help the bullish argument, but at this point it seemed to add little.
Possibility of a Solana short squeeze
The three-month lookback period of the Solana liquidation heatmap highlighted $170 and $185 as the next interest zones. The $165 and $150-$155 levels are also potential places where a downtrend could reverse.
They coincide with the technical support levels. Bandwidth formation is likely to continue since the $170 liquidity zone was swept, but indicators and sentiment have been positive.
The liquidation levels showed that there could be another twist to the story. Cumulative liquidation levels turned more negative – a sign that short positions were becoming increasingly dominant.
Realistic or not, here is SOL’s market cap in terms of BTC
If prices consolidate around the $165-$167 zone and attract more short sellers, this would lead to more short liquidations. A short-term bullish reversal could put pressure on these short positions, resulting in a successful defense of the range lows.
Overall, traders can anticipate a price increase around $165, but they should also be prepared for the range to fail. Especially in the case of Bitcoin [BTC] can’t hold $64,000.