Solana: Can sellers hijack SOL’s latest recovery?
Solana fronted an impressive recovery but was yet to flip the daily timeframe to bullish bias at press time. Any faltering could present a shorting opportunity.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- The daily chart market structure was bearish unless SOL go beyond $20.60
- Massive sell/buy limit orders were placed at $20 and $17, respectively.
Solana [SOL] recorded an impressive recovery and was up 4% in the past 24 hours before press time, as per CoinMarketCap. The altcoin traded at $18.8 at press time, up from the recent low of $17.3, but was still far from the recent high of $20.60.
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In the meantime, Bitcoin [BTC] reclaimed its range-low of $25.8k and was fixated on the mid-range near $27k at the time of writing.
Will SOL sustain the recovery?
SOL could clear the dynamic resistance of the 50 Exponential Moving Average (EMA) and edge higher if BTC retests $27k. It had reclaimed the previous bullish order block (OB) of $18.3 – $19.5 (white).
The immediate hurdle was the 50-EMA of $18.81, which could be quickly cleared if BTC graces the $27k mark. But bulls could only have an edge if they exceed $20.6 and flip the daily chart’s market structure bullish.
Should they falter at the previous high of $20.60, sellers could seek market entry and drop the price lower to the white area of $18.3 – $19.5 or the recent low of $17.3.
Such a drop could present a shorting opportunity with an entry at $20. Based on traders ‘ risk appetite, the take-profit targets could be $18, $17.75, or $17.3.
A move beyond $21 will invalidate the short idea. But bulls must clear the roadblock of $21-22 (red) to push forward.
Meanwhile, the Relative Strength Index (RSI) has been in the lower range since mid-August, underscoring increased sell pressure over the same period. Similarly, the Chaikin Money Flow (CMF) retreated below zero recently and struggled to surge beyond it, demonstrating eased capital inflows.
Massive sell/buy limit orders at $20 and $17
The live order book tracking platform, Mobchart, indicated significant sell and buy interest at $20 and $17 on the four-hour timeframe at press time. As such, we could see a price reversal at or near these levels. If so, the above short idea’s entry position at $20 sounds reasonable.
How much are 1,10,100 SOLs worth today?
SOL’s move beyond $21 will call for exiting the above short position. So, traders should track BTC movement for risk mitigation and optimized set-up.
