Solana [SOL] slips below $21 level, can bulls suffer further losses
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 4-hour market structure was bearish
- The $21 and the resistance at $22.6 could be critical next week
Bitcoin saw some indecision on the price charts over the past week. The interest rate hike of 25bps on 22 March induced volatility but did not break BTC’s uptrend. On the other hand, the 4-hour chart of Solana shifted bearish due to the price action on that day.
Read Solana’s [SOL] Price Prediction 2023-24
Solana also saw a decline in NFT activity on its network. On the price charts, even the higher timeframe structure such as on the daily was bearish. This could see the prices slump further and head toward $19 and $17.7.
Solana bears are expected to force prices lower
The short-term range (yellow) that Solana was trading within the last week was lost as selling pressure intensified. The structure had been bearish even before the prices fell below the range lows at $21.05. At the time of writing, SOL witnessed a small bounce from $20.15.
A retest of the $21 area can be used to sell the asset. Alternatively, if the prices continued to rise, the bearish order block in the $22.6 region could offer a selling opportunity as well.
It already acted as a lower timeframe bearish stronghold on 23 March when a move up to $23 was quickly rejected. A repeat of this scenario was possible, but less likely.
This was because a move above $21 would shift the lower timeframe structure in favor of the bulls. Another 8-9% move upward would be indicative of strong buying pressure, and uncertainty can seep in on the lower timeframes.
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Hence, a move above $21 would give some power to the bulls while a rejection there would reinforce bearish pressure.
At the time of writing, the RSI stood at 43.7 to show neutral to bearish momentum. The OBV has declined over the past two days but the trend was upward for the past two weeks. Hence a move past $21 can not be discounted.
The futures market signaled negative sentiment
The predicted funding rate of Solana stepped into positive territory over the past few hours. This meant long positions paid funding fees to the short positions, and signaled some bullish sentiment in the market.
Yet the Open Interest continued to slide downward alongside the price. This was a sign of discouraged longs and signaled bears had the upper hand in the market recently.