SOL attempts recovery after minor pullback: Are shorting opportunities limited
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- SOL exhibited increasing RSI divergence.
- The funding rate remained positive.
Solana [SOL] experienced a short pullback after hitting the price ceiling and supply zone of $26. It depreciated by 7.68% before steadying near $24. A successful recovery could undermine short-term sellers, but they can still look to bid at certain levels.
Read Solana’s [SOL] Price Prediction 2023-24
Meanwhile, Bitcoin [BTC] dropped to $29.0k before attempting a recovery. SOL’s recovery and upswing could continue if BTC’s surge persists in the next few hours/days.
The price rejection at $26 tipped sellers to gain market entry, sinking SOL to $24. But sellers may be subdued if bulls find steady ground at $24.
With a surging BTC, SOL could aim at the price ceiling of $26 again, but near-term bulls must clear the $25.10 hurdle to gain leverage. The supply zone near $26 could block further uptrend momentum if the $25.10 hurdle is cleared.
As such, the supply zone could exert another downward pressure, setting SOL to depreciate again, especially if BTC doesn’t exceed $31k. Sellers can look to bid at the supply zone again and target the immediate support levels at $24 or $22. A close above $27 will be an invalidation of the thesis.
Meanwhile, the four-hour chart exhibited increasing RSI divergence, which could suggest a likely retracement. Similarly, the ADX (Average Directional Index) declined further, suggesting potential consolidation or retracement.
But the stochastic RSI hit the oversold zone, making SOL ripe for a likely price reversal.
Funding rates remained positive
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According to Coinglass, SOL’s funding rates history remained relatively positive in the first half of April. Despite the recent retracement, the funding rates were still positive at press time, which could give bulls the upper hand.
Moreover, the exchange SOL Long/Short ratio heavily leaned toward bulls at the time of writing. It shows most investors were bullish on the asset and optimistic about its short-term prospects. Investors should track BTC’s price action for better-optimized trade setups.