Solana [SOL]: A new buying opportunity is feasible at $21.27, but only if…

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

• SOL faced rejection at a key zone. 
• Trading volumes fluctuated while sentiment remained negative. 

Solana [SOL] suffered over 5% losses in the past seven days. It saw rejection at $23.99 on 30 April and traded at $22.16 at press time. On the daily front, the “Ethereum [ETH] killer” was only up by about 0.12% in the past 24 hours.  

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Despite its daily and weekly dismal performance, SOL could offer an exciting opportunity for swing traders if a pullback retest occurs at the immediate support level. At press time, Bitcoin [BTC] struggled to cross $29k and could trigger SOL to retest this key support. 

$21.27 support – Is a retest feasible?

Source: SOL/USDT on TradingView

The sharp drop on 19 April left an FVG (fair value gap) between $23.19 and $24.01. Price action filled the zone on 19 and 30 April, leading to a sell-off. The drop retested $21.27 support, followed by a rebound that faced rejection at the same FVG zone. 

A pullback retest at the $21.27 support and confirmed uptrend could offer a new buying opportunity, targeting the immediate obstacle at the FVG. The stop loss will be $20.36, just below the support. 

A close below the support zone near $21.27 will invalidate the above bullish thesis. The support has proven steady since the second half of April and will indicate a weakening structure if it cracks. Such a downswing could see SOL retest at $19.92 or March lows of $17.30. 

The RSI fluctuated near the median level – indicating the buying and selling were equal in the same period. Similarly, the CMF (Chaikin Money Flow) hovered near the zero mark – evidence of fluctuation between outflows and inflows of money into SOL’s market. 

Trading volume wavered; negative sentiment increased

Source: Santiment

Read Solana [SOL] Price Prediction 2023-24

According to Santiment, SOL saw significant fluctuations in trading volume since the end of April. At press time, the volume declined further, limiting prospects of a strong recovery. As such, SOL could retest the support if more price slump hits it. 

The negative sentiment also deepened at the time of writing as funding rates flipped to negative. It shows investors’ confidence in the asset was dented, and demand in the derivates market faltered. However, a bullish BTC could quickly change SOL’s fortune.