Solana exhibits boring price action, but will trends change?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Solana [SOL] performed well in the last week of May. On 25 May, SOL, which had been trending downward since mid-April, bounced higher from the $19.25 support level. At press time, the price was at a resistance again.
The bigger picture of the price action of the past four months showed Solana swing from $18 to $26. While there was no strong trend, the lower timeframe traders would benefit enormously from understanding where the shift in trends could occur.
Solana pushed toward $21.5 again last week without luck
The market structure on the daily timeframe was bearish. Solana faced resistance at the $21.3 level, which has been important since late March. At the time of writing, it hovered right beneath this level. The trading volume has been low throughout May, which pointed toward a phase of consolidation.
As a result, the OBV did not see wild swings in any direction. It also did not display a trend, and its flat trend showed that neither buyers nor sellers had the upper hand. The CMF was barely above +0.05, showing strong capital flow into the market.
A daily session close above $21.55 can be taken as a bullish shift in market structure. Following this, traders can look to buy SOL and wait to sell at a test of the resistance at $24.2 and $26. On the other hand, a move back to the $19.2 support would also offer a buying opportunity, albeit riskier.
The RSI flipped neutral 50 to support and indicated the trend was weakly bullish. A move to $21.5 and rejection next week would be indicative of a move lower. Bitcoin could also influence its direction.
Development activity should encourage investors
How much is 1, 10, or 100 SOLs worth today?
Solana lacked a strong higher timeframe price trend in recent weeks and its social dominance slowly crept lower in May. Neither the falling prices nor the dwindling dominance deterred the developers, which showed robustness.
Alongside the weak bearish price action of the past two months, weighted sentiment also remained negative. This was not a surprise, as it takes strong price movements and very positive news from developers to shift the sentiment the other way.