Connect with us
Active Currencies 14778
Market Cap $2,557,616,555,646.10
Bitcoin Share 51.24%
24h Market Cap Change $0.70

Solana [SOL]: Before you go short, watch out for these factors

2min Read
Short or long on Solana? Here are a few factors to watch out for

Share this article

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

Bitcoin [BTC] faced intense selling pressure and fell to the $20.8k mark as it experienced a 26% drop in under two days. Ethereum [ETH] fared worse and recorded losses of around 30% in the same time period. Solana [SOL] was also in the grip of the bears, and its structure on the price charts suggested that another drop could be around the corner. If the bulls can reclaim $32, some respite could be seen, but the more likely outcome remains further losses for Solana.

SOL- 4H

Short or long on Solana? Here are a few factors to watch out for

Source: SOL/USDT on TradingView

The H4 market structure showed a strong bearish bias. Since April, the trend has been sharply downward, although SOL was able to hold on to the $41 support level throughout May. In June, however, the price slipped beneath this level and has since retested the $45 area as a supply zone, and confirmed $41 as resistance, before falling swiftly in the past week.

The $32 area (red box) has also been retested as a supply zone, while the $26-$27 area has been retested as a demand zone (cyan box). The Fibonacci extension levels showed that $27.8 could act as temporary support on the way south.

SOL- 1H

Short or long on Solana? Here are a few factors to watch out for

Source: SOL/USDT on TradingView

The hourly chart was slightly more complicated. The trend was still bearish, but the lower timeframe market structure was broken because of the push to $32.3 in the past few hours of trading. In dotted white are two levels that could see SOL establish a range within, with the $29.5 area being a temporary demand zone.

However, despite this short-term bullish break, the larger timeframe structure remained bearish. Therefore, it was likely that SOL would head back toward the $26 mark, and possibly even lower.

Short or long on Solana? Here are a few factors to watch out for

Source: SOL/USDT on TradingView

The Relative Strength Index (RSI) stood at 49.7, but if the bulls can defend the $29 zone, SOL might still be able to push toward $32 once again. However, a session close below the cyan box would likely see SOL drop toward $26.

The Stochastic RSI formed a bearish crossover in overbought territory and was headed lower, while the OBV faced resistance at a level that was supported just a few days ago. The selling pressure could force the OBV to drop yet again.

Conclusion

An hourly trading session close beneath $29 could offer an opportunity to enter a scalp short position, with a stop-loss just above $30 and take-profit at $26.2. However, if the bulls can defend the $29 area, a revisit to the $32 area could offer shorting opportunities.

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.