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Analysis

Solana’s 14% price fall, prediction, and how you can profit from the dip

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SOL fell, just like the rest of the market. Is there a silver lining though?
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>14% in 2 hours - Solana's price fall, prediction, and how you can profit from the dip
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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • Higher and lower timeframe trends of Solana prices seemed to be at odds, suggesting a bullish reversal could soon occur
  • Lack of selling volume recently meant that the pullback could be shallow

Solana’s [SOL] network saw a significant increase in social media engagement recently. A large part of this can be attributed to the Jito [JTO] airdrop. As a result, the DEX volume on Solana’s network also saw a huge uptick.

Solana’s NFT sales also jumped higher last week. In fact, AMBCrypto’s recent report had also noted a rise in network activity, with the Solana blockchain ranked number 1 for total transactions in November. Despite these developments, however, the token saw a pullback recently on the price front.

Breakout past November’s range could be wholly retraced

In a tranquil art style reminiscent of a watercolor painting, a Shiba Inu stands atop a gentle hillock, gazing pensively at the breathtaking sunset before it. The sky is a canvas of warm, pastel hues, transitioning from vibrant orange and coral near the setting sun to soft lavender and deep indigo as it nears twilight.The Shiba's coat, portrayed with delicate brushstrokes, captures the richness of its red fur as it gently ruffles in the evening breeze. Its ears stand alert, attuned to the sounds of nature. The dog's eyes, dark and reflective, mirror the awe-inspiring colors of the descending sun, revealing a sense of wonder and serenity. The landscape unfolds below, with rolling hills cloaked in verdant green and pockets of wildflowers, their petals swaying gently in the wind. The whole scene exudes a sense of peaceful harmony between the Shiba Inu, the natural world, and the mesmerizing beauty of the setting sun, inviting viewers to pause and savor the tranquil moment.

Source: SOL/USDT on TradingView

A range that Solana traded within for the most part of November was marked in yellow. It climbed from $51.1 to $64. On 7 December, SOL broke out past the range highs and made it to $77.78. Alas, it has declined since then.

The RSI fell below neutral 50 to show a shift in momentum in favor of the bears and the On-Balance Volume (OBV) also trended downwards over the last three days. This suggested that selling volume was stronger. The volatility on Monday saw a candlewick to $64.18 on the 2-hour chart which saw a quick bounce.

And yet, the two-hour timeframe signalled a bearish market structure. The move below the recent higher low at $70 (orange) marked this shift in structure. The Fibonacci retracement levels (cyan) plotted based on the rally from the range highs noted that $63.11 and $66.24 could be levels where a bullish reversal could happen.

Drop in Open Interest illuminated market participants’ sentiments

In a tranquil art style reminiscent of a watercolor painting, a Shiba Inu stands atop a gentle hillock, gazing pensively at the breathtaking sunset before it. The sky is a canvas of warm, pastel hues, transitioning from vibrant orange and coral near the setting sun to soft lavender and deep indigo as it nears twilight.The Shiba's coat, portrayed with delicate brushstrokes, captures the richness of its red fur as it gently ruffles in the evening breeze. Its ears stand alert, attuned to the sounds of nature. The dog's eyes, dark and reflective, mirror the awe-inspiring colors of the descending sun, revealing a sense of wonder and serenity. The landscape unfolds below, with rolling hills cloaked in verdant green and pockets of wildflowers, their petals swaying gently in the wind. The whole scene exudes a sense of peaceful harmony between the Shiba Inu, the natural world, and the mesmerizing beauty of the setting sun, inviting viewers to pause and savor the tranquil moment.

Source: Coinalyze

The last two days of trading saw Solana’s price slowly decline from $7.78 to hit $70. This was accompanied by a fall in Open Interest (OI). The inference from the drop in OI and prices is that market participants are losing their bullishness.

Is your portfolio green? Check the Solana Profit Calculator

Surprisingly, the spot CVD has trended higher. This is a sign of healthy demand for the token in the spot markets, even though the short-term sentiment has been bearish. Therefore, the recent pullback could be temporary and shallow. On the higher timeframe charts, the $60-$65 zone represents a support zone that could see bulls initiate a recovery.

 

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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