Solana: Long-term investors can look to this level
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 buyersOn 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
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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.