Solana prices expected to see a bounce from this level

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• The 4-hour market structure of Solana was bearish but the risk-to-reward was reasonable. 
• The Fibonacci retracement levels helped determine where the bulls would be invalidated.

Solana [SOL] presented a risky buying opportunity for lower timeframe traders. Its trend and market structure were bearish on the higher timeframes, but analysis of the 4-hour and 1-hour charts showed that a bounce in prices was possible.

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

On 23 June Bitcoin [BTC] managed to reach $31.3k, the highest that BTC prices have reached in 2023. The previous local high was at $31k in April. This suggested bullish intent, but the price action of the past week suggested that a pullback cannot be ruled out. This made the long setup presented below riskier, and traders must be ready to cut the trade upon invalidation.

The short-term Solana trend was on the verge of shifting bearish

Source: SOL/USDT on TradingView

This showed SOL has embarked on a downtrend. The Directional Movement Index showed the -DI (red) had a value of 25 and the ADX (yellow) was at 19.54. ADX above 20 would signal a strong bearish trend. Meanwhile, the RSI was also below neutral 50, showing downward momentum. The CMF was falling but showed significant capital inflow with a reading of +0.06.

A set of Fibonacci retracement levels was plotted based on SOL’s bounce from $12.8 to $17.75. It showed the 50% retracement level was at $15.28- which represented a good opportunity to enter long positions, with invalidation below $14.88. Conservatively it is shown to be at the 61.8% level above. To the north, the bearish H4 order block at $18.7 lined up well with the 23.6% extension level at $18.92.

Coinalyze data showed rising demand but sentiment remained bearish

Source: Coinalyze

Is your portfolio green? Check the Solana Profit Calculator

Yet, the spot CVD has begun to trend upward. Over the past 24 hours, the CVD rose slightly, while the OI remained flat despite short-term volatility. Taken together, it showed that market sentiment remained in favor of the sellers.