Solana [SOL] breaks past $20 mark, watch out for a dip into this region
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
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- The H4 structure was firmly bullish at press time.
- A minor dip followed by further gains was a likely scenario.
Bitcoin [BTC] continued to post gains over the weekend but displayed signs of a bearish divergence with momentum indicators. It also traded beneath the $28.7k resistance, a level that had been BTC’s last stand before a plunge to $19k in June 2022. Solana [SOL] also reversed its drop to $16, and bulls pushed it back above $20.5.
How many are 1,10,100 SOL worth today?
The smart contract count and development activity were on the rise in March, which boded well for longer-term investors. Can the asset rise to the $26.6 range high once more?
A dip into the imbalance could offer bulls a chance to re-enter
On the four-hour chart, two lower highs were marked in blue. Both of these lower highs have been beaten within the past ten days. The lower LH would be a more aggressive reading of the structure, and the upper LH would be a more conservative method.
Combined with the series of higher lows Solana has posted, the market structure was firmly bullish. Moreover, the price has also climbed back within the $20.5-$26.6 range. The price had traded within this range from mid-January to early March.
In the past two days, a move upward past $21 left an imbalance on the charts. This fair value gap was highlighted in white and lies close to the range lows. Therefore, a price move to the $20.5-$21 region could offer a buying opportunity targeting the mid-range resistance level at $23.5.
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Traders can opt to zoom in on lower timeframes to search for entries. On H4, the MACD showed bullish momentum. The DMI also showed a strong uptrend in progress with both the ADX and the +DI above the 20 mark.
The spot CVD began to make a reversal
The four-hour chart on Coinalyze showed the Open Interest has gained close to $30 million since 16 March. During this time, the price has rallied from $19 to $22.2. The inference was that sentiment was bullish in the market.
The spot CVD has been in decline in recent months. However, this changed over the past two weeks. It formed a bottom and has registered some gains over the past few days, to reflect the buying pressure that drove SOL’s rally from $16.