Solana bulls fight to hold $24 support but here’s why a drop could be imminent
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
-Solana has a bullish market structure but traded just above important short-term support.
-The sentiment was weakly bearish in the futures market.
Solana [SOL] embarked on an impressive rally over the past week. It surged from $20.1 to $25.49 from 10 April to 14 April, but the past few hours saw SOL drop to the $23.74 mark. At the time of writing, the token saw a bounce in price.
Realistic or not, here’s SOL’s market cap in BTC terms
The higher timeframe analysis showed the breakout past $23 meant a rally toward $26 was likely, but a short-term retracement to this support region could occur soon. Such a retracement could be hastened if Bitcoin [BTC] turned bearish.
Solana showed increased selling pressure despite the gains over the past week
The Awesome Oscillator was above the zero line which showed momentum was bullish. However, the red bars on the histogram indicated that the bullish momentum was weakening. At the time of writing, SOL buyers skirmished to hold on to the $24-$24.5 support zone.
If they succeed, a push toward $26 could be on the table. But the weekend could see low volume and heightened volatility. The A/D indicator formed a series of lower highs over the past few days, showing rising selling pressure.
The market structure remained bullish, but a drop below $23.74 would show bears have the upper hand. The falling A/D pointed toward this likelihood. Beneath the $24 level, the $22.4-$23 area is likely to be a strong zone of support.
How much are 1, 10, or 100 SOL worth today?
If Bitcoin fell below the $30k area, short sellers can pile into the market. A shift in sentiment toward the bears would become more likely and could drag Solana downward as well.
The CVD reinforced the selling pressure and bullish sentiment weakened
The spot CVD has been rising from 11 April to 14 April, according to the 1-hour chart from Coinalyze. This showed that buying volume was dominant and highlighted the sturdiness of the Solana rally from $20.5 to $25. But the sellers have begun to enter the market over the past 24 hours.
The CVD began to slip lower on 15 April, and this was accompanied by a drop in the Open Interest as well. The falling prices and OI showed that short-term sentiment was bearish as long positions were discouraged. Hence, short-term SOL bulls can wait for sentiment to shift in their favor before entering.