Connect with us
Active Currencies 14791
Market Cap $2,469,545,528,576.10
Bitcoin Share 51.84%
24h Market Cap Change $-2.13

Solana in near-term could face selling pressure in this area

2min Read
Solana slips back beneath the $38 support zone as traders anticipate further pain

Share this article

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Solana had crucial support at $37.71 but this level was broken in a swift move as Bitcoin plunged from $22k to $21k in the span of four hours.

At the time of writing, Solana had a strong bearish outlook and a retest of the $38 zone could offer a shorting opportunity. Sellers took the driving seat on 24 July and haven’t relinquished it yet, and the bleeding could continue through this week.

SOL- 2-Hour Chart

Solana slips back beneath the $38 support zone as traders anticipate further pain

Source: SOL/USDT on TradingView

Based on the swing low and swing high at $31.82 and $47.36 respectively, Fibonacci retracement levels were plotted. The 61.8% retracement level had confluence with the horizontal level at $37.71, but SOL broke through this region with force.

The previously bullish structure was also broken last week when buyers were unable to defend the $43-$44 region.

Solana had a shorter timeframe bullish structure since the start of July. In mid-June, a rally from $26 to $42 was initiated. It was borne on the back of steady demand as well.

In July, the bulls were able to maintain SOL’s upward trajectory as they pushed the coin to retest the $38 region twice as resistance and flip it to support two weeks ago. Another leg upward to $47 materialized, but Bitcoin was rejected at the $24.1k mark.

Bitcoin faced resistance at $21.6k-$21.9k, and the $22.5k areas. A move upward appeared unlikely. Price action-wise, it was a similar story for Solana. SOL was likely to face intense selling pressure at the $37.7 mark as well as the $39.5-$40.5 area.

Rationale

Solana slips back beneath the $38 support zone as traders anticipate further pain

Source: SOL/USDT on TradingView

The 2-hour RSI dropped beneath the neutral 50 level a few days ago. In recent hours of trading, it dove below the 40 value as well, to signal strong bearish momentum.

The Stochastic RSI was at oversold territory. A bearish crossover in the overbought territory a few hours later can be a cue for the next move downward.

The OBV slipped beneath a support level from mid-July. Once again this highlighted the heavy selling pressure behind SOL. Volume favored the bears, and buyers looked unwilling to bid yet.

Conclusion

Strong bearish momentum was apparent for Solana, and the next levels of support to watch out for are $35.15 and $32. A bounce to retest the $38 area as resistance could occur, but such a move should be seen as an opportunity to sell the asset.

Share

Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.