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Solana [SOL] blocked by a short-term supply zone – Can bulls bypass it?



Solana [SOL] blocked by a short-term supply zone – Can bulls bypass it?
Source: Unsplash

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

  • SOL was in a neutral structure on the three-hour chart. 
  • The Funding Rate remained positive despite a slowed development activity. 

Solana [SOL] swiftly went from $20 to $25 on Friday, 20 January. Afterward, a crucial short-term supply zone blocked its upward price action extensively. At press time, SOL traded at $24.10 and still had to deal with the above-mentioned supply zone. 

Read Solana [SOL] Price Prediction 2023-24

Fed watchers expect a dovish announcement from next week’s FOMC meeting. If their bets are confirmed, the markets could be triggered positively, tipping Bitcoin [BTC] and the rest of the altcoins for another round of price rallies. 

But a hawkish FOMC release would clear the recent gains and send the markets into a temporary correction phase, affecting SOL too. 

The supply zone blockage: Can bulls overcome it?

Source: SOL/USDT on TradingView

On the three-hour chart, the Relative Strength Index (RSI) was 49 and rested near the mid-level of 50 – thus showing a neutral structure.

However, it had retreated from the lower range, accompanied by rising On Balance Volume (OBV), indicating a genuine demand and rising buying pressure. 

If the trend is sustained, the RSI could crossover the mid-level and push SOL to overcome the $24.33 hurdle and move near the supply zone’s (red) lower boundary of $24.60.

How much are 1,10,100 SOLs worth today?

However, bypassing the supply zone of $24.60 – $25.42 can only occur if BTC exceeds the $23.5K level. SOL could retest the overhead resistance at $26.61 if it clears the supply zone blockage. 

But the above bias would be invalidated if bears devalue SOL beyond the demand zone (green) of $23.3 – $23.8. The drop could be contained by the 75-period EMA (exponential moving average) or the $22.67 support level. 

Development activity slowed, but demand remained impressive

Source: Santiment

As per Santiment data, SOL’s development activity continues to rise, improving investors’ confidence as indicated by improving weighted sentiment. However, at press time, the development activity remained relatively flat as prices declined, denting investors’ confidence in the process. 

But the Funding Rate remained positive, indicating a genuine demand in the derivatives market and a bullish outlook for the asset. As such, SOL could be tipped to overcome its resistance levels on its upward path.

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Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot's writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S - There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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