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Analysis

Solana: Long-term investors can look to this level

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Solana’s rising OI signaled strong bearishness, and the lack of demand meant that prices were headed lower in the near-term. This could see SOL drop to the $22 demand zone soon.
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Solana: Long-term investors can look to this level
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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • Solana has a strongly bullish outlook on the higher timeframe price charts.
  • The retracement into a weekly region of interest meant buyers can look for opportunities to enter the market.

Solana [SOL] has registered strong gains since the fall to $15 in mid-June. Prices climbed as high as $32 on 10 July, although the bulls were unable to hold on to the $30 level thereafter.

Read Solana’s [SOL] Price Prediction 2023-24

The presence of a demand zone just below $22 from the weekly timeframe meant it was a place where a bullish reversal could occur. Bitcoin [BTC] and SOL both have a bearish short-term outlook. Can we see some more losses followed by a rally for Solana?

The confluence of breaker and Fib retracement presented a zone of interest for the buyers

Solana [SOL] retraces toward a support zone, here's where investors can look to buy

Source: SOL/USDT on TradingView

On the 3-day chart, the price action has a bullish structure. The move past the previous lower high at $22.3 reached $32.13, signaling firm bullish intent. A set of Fibonacci retracement levels (yellow) were plotted based on the move from $12.8 to $32.13.

It showed the 50% and 61.8% retracement levels sat at $22.47 and $20.18 respectively. Moreover, on the weekly timeframe, a bullish breaker block was seen that extended from $20.26 to $22.3. This had confluence with the Fib levels too.

Therefore, buyers can look to bid SOL after the price enters this zone. A lower timeframe bullish market structure break within this zone can give buyers an opportunity. Meanwhile, a move below the $18.32 level would invalidate this idea.

The OBV saw a large uptick in late June and July but has pulled back a bit over the past three weeks. Overall, the buying volume was still dominant. The RSI also showed bullish momentum with a reading of 56.

The lower timeframe SOL charts continued to show bearish pressure

Solana [SOL] retraces toward a support zone, here's where investors can look to buy

Source: Coinalyze

Is your portfolio green? Check out the Solana Profit Calculator

Data from Coinalyze showed that Open Interest saw a sharp drop on 30 July as the price fell from $25 to $23.5. This suggested bearish sentiment, which was compounded on 31 July when the OI rose alongside falling prices. The spot CVD was also in a downtrend.

The rising OI signaled strong bearishness, and the lack of demand meant Solana prices were headed lower in the near term. This could see SOL drop to the $22 demand zone.

 

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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.
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