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.
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.
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.
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.
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.