Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- SOL showed the possibility of a range formation over the past week.
- The recent sell pressure meant a breakdown beneath $20 was a likelihood traders must be prepared for.
Solana [SOL] has a bearish outlook for the next week. The test of the $20 support zone was expected to see demand flood the market, but that was not the case. Conversely, SOL bulls have been lukewarm in their enthusiasm compared to their bearish counterparts.
Read Solana’s [SOL] Price Prediction 2023-24
While the NFT growth was encouraging, the sentiment behind the token leaned in favor of the sellers in the lower timeframe price charts. How can Solana traders navigate the coming days?
Solana forms a range above the $20 support
The lowered volatility after the sharp drop in mid-August saw Solana developing a range. It extended from $20 to $22.18, with the mid-range mark at $21.09. At press time, SOL was trading at $20.7, which had been resistance a few days ago but was flipped to support during the recent bounce.
Aggressive buyers can look to enter in this area, targeting the range highs. This was because the market structure was bullish. The OBV has also formed higher lows over the past week, although it was unable to breach the local resistance (dotted orange).
The RSI was just below the neutral 50 mark and suggested bullish momentum had run its course. If this were the case SOL could drop to the $20 level once more, offering a more attractive risk-to-reward opportunity for bulls.
The selling pressure in the last 48 hours showed bulls could face heightened risk
Within the past two days, SOL faced rejection at the $21.9-$22 area. This was accompanied by a significant downward move on the spot CVD. The Open Interest has also declined. Together they showed firm bearish sentiment and strong sell volume. The funding rate was also negative to underline market sentiment.
How much are 1, 10, or 100 SOL worth today?
Therefore, the bullish idea presented above was made riskier. Buying Solana at $20.7 or $20 could see a trader face loss.
Scalp traders can look for a lower timeframe bullish structure break to enter long positions, but risk-averse bulls can wait for sentiment to shift in the lower timeframes.