Solana [SOL] bounces from range-low support, what’s next?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Range-bound formation persisted with neither buyers nor sellers ready to give up price levels.
- Traders adopted a cautious approach in the futures market.
Successive attempts by Solana [SOL] bulls to break out of the compact price range have not yielded the expected outcome. The latest bullish rejection at the range-high kept SOL in its sideways movement between $22.4 to $25.3.
Read Solana’s [SOL] Price Prediction 2023-24
Following Bitcoin’s [BTC] descent below $29k, SOL dipped rapidly from the range high. However, SOL’s price recovered immediately through a combination of the bullish order block (OB) and support level.
If SOL’s recent price precedent is to be followed, bulls will make another attempt for the range high ($25.3). Nevertheless, bears could take advantage of the bearish market sentiment to flip the $22.4 support level.
Bulls and bears refuse to give up their respective price levels
The recent price rejection at the $25.3 resistance saw the Relative Strength Index (RSI) dip below the neutral 50. However, it was recovering, as of press time to highlight rising buying pressure for Solana. On the other hand, the On Balance Volume (OBV) fell off over the past 48 hours and didn’t show any signs of recovery yet.
A look at the price chart on the 12-hour timeframe showed the price tussle between buyers and sellers has ranged on for close to a month. After sellers successfully flipped the $25.3 level to resistance on 22 July, bulls have staunchly defended the $22.3 support level.
While bulls have refused to give up the support level, bears have also made the $25.3 price level a stronghold, rebuffing multiple bullish breakout attempts. This oscillating price action has limited SOL’s price progress on the higher timeframes with traders waiting for a clear market trend.
If bulls successfully rally to the range high again, a close above the level will see further upside available at the $29-$32 price level. Alternatively, bears flipping the $22.3 support level could see sellers aim for the $18-$20 price zone.
Tight margins in the futures market
The exchange long/short ratio typically serves as a good indicator of the direction speculators think the market will swing next. In the case of Solana, the long/short ratio remained firmly neutral with neither longs nor shorts holding a significant advantage.
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This hinted at speculators adopting a cautious approach in anticipation of a breakout from the price range.