Solana: Bulls’ move to $20 stalls, here’s why
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Strong capital inflows boosted bullish charge for $20.
- Longs held a 52.67% advantage on exchange long/short ratio.
The Securities Exchange Commission’s (SEC) rejection of the recent Bitcoin [BTC] Spot ETF applications by traditional asset managers rattled the markets on 30 June. However, this did little to dampen the bullish sentiment currently prevalent in the market.
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Bitcoin remained above $30k and while altcoins such as Solana [SOL] dipped aggressively. However, it had recovered as of press time. It remains to be seen what further effect the announcement will have on the markets in the coming days.
Solana maintains bullish push for $20
Like other altcoins, Solana has benefitted tremendously from a bullish Bitcoin. This has seen SOL rise from the June low of $12.81. Trading at $18.35, as of press time, this represented a 42% increase between 10 June and 30 June.
With price approaching the $20 psychological zone, bulls were confident of flipping it to support. Although the retracement on 30 June slowed down the momentum, all signs point to bulls achieving their short-term aim.
The bullish rally has been fueled by strong capital inflows since 23 June with the Chaikin Money Flow’s (CMF) reading of +0.20, showing that strong backing still existed for bulls. Similarly, the Relative Strength Index remained above neutral 50 and stood at 62 at the time of writing. This highlighted buyers’ resolve for more gains.
Assessing the current price action, a move northward is more likely for SOL. However, SOL has already been rejected once at the $20 level over the past 24 hours. A session close above $20 on the lower timeframes could flip the structure on the higher timeframes, with buyers able to push on for $23.
However, a bearish candle close on the higher timeframes would invalidate this idea and lead to a possible retest of the $16.66 support level by bears.
Bulls can be encouraged by a positive funding rate
A look at the exchange long/short ratio on the four-hour timeframe revealed strong bullish sentiment. Data from Coinglass showed longs held a 52.67% advantage.
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Similarly, the positive Funding Rate since 26 June, along with rising prices, portrayed a good outlook for buyers. Taken together, the $20 level looks achievable for bulls in the short term.
However, traders should closely track the development of the Bitcoin ETFs, as this could impact Bitcoin’s price and subsequently have an effect on Solana.