Solana: Can bulls sustain the buying pressure

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• Bears recently broke below a critical price level but a quick bullish rebound could put a pause to further gains.
• Sellers continued to hold the greater share of open contracts on the higher timeframes. 

Solana’s [SOL] bearish momentum saw it break below the confluence of the $22.4 support level and the bullish order block (OB) over the past 48 hours. This was after the bullish defense of the level failed to withstand the selling pressure with price descending to the $19 region.

Realistic or not, here’s SOL’s market cap in BTC terms

Despite the bearish bias, bulls were attempting a quick recovery with 7% gains over the past 12 hours. A critical hurdle stands in the way of the bullish rebound at the new resistance level ($22.4). Can Solana bulls sustain the buying pressure to reverse the recent losses?

Will bears extend gains on retest of $22.4 level or will bulls rebound?

Source: SOL/USDT on Trading View

Solana’s bearish slide has seen sellers flip two key support levels over the past month. The $25.3 support was the first to give way at the end of July. While bulls staunchly defended the $22.4 level, it also caved to the selling pressure on 17 August.

The flip of the most recent support level was significant because it broke the previous lower high suggesting a shift in momentum on the higher timeframes.

Despite bears having the upper hand, market conditions looked to be picking back up with Bitcoin [BTC] trading at $26.5k, as of press time. This could help bulls quickly recover the $22.4 price level.

On the other hand, if the selling pressure persists, the re-test of the $22.4 level could present new shorting gains with sellers targeting the $18-$20 price zone.

Meanwhile, the short-term bullish recovery saw the Relative Strength Index (RSI) move to 43. This signaled rising buying pressure. Similarly, the Chaikin Money Flow (CMF) turned positive with a reading of +0.06, hinting at increasing capital inflows.

How much are 1, 10, or 100 SOL worth today?

Sellers continued to dominate open contract positions

Source: Coinglass

Data from Coinglass showed that sellers were more likely to extend their gains. The long/short ratio saw shorts hold 52.27% of all SOL open contracts. This was in contrast to the 47.73% share held by longs on the 12-hour timeframe.

With an $18 million difference in open positions, sellers remained confident of maintaining the bearish bias. However, traders should actively track BTC’s price action, as a bullish push could reverse the bearish bias.