Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Solana bears flipped the $21.6 zone from support to resistance
- The interim support at $21.13 has been defended in recent hours, but that might not last long
Solana [SOL] has trended higher since mid-September. The recent losses that forced SOL bulls to retreat from $25 haven’t broken the HTF trend. The blockchain network has done well in 2023 to improve its underlying technology and construct partnerships.
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A recent analysis from AMBCrypto noted that the $22 level was vital for the SOL bulls to defend. This did not occur, instead, $22 was retested as resistance on 12 October. There were two important short-term pockets that traders could keep an eye on.
The $21.5 former support could see a retest from the south
The two-hour chart showed that the trend and market structure of Solana in this timeframe were solidly bearish. Moreover, the $21.5-$21.84 area was a support zone on Monday (9 October) but was flipped to resistance on 12 October.
The Relative Strength Index (RSI) has been below neutral 50 since 8 October, and the On-Balance Volume (OBV) has been in a downtrend for the past ten days. This meant the selling volume has been steady and outweighed the buy volume. Combined with the flip of $21.5 to resistance, it was likely that SOL was headed further south.
A retest of $21.5 could be used to go short, targeting the $20.2 support zone from late August. $21.13 and $20.6 were also levels of support that could briefly halt the bearish march.
The market sentiment suggested a bounce to $21.6 might not materialize
The hours before press time saw SOL cling to the $21.13 as support. A minor bounce appeared to be brewing. However, the Open Interest (OI) was declining at press time. It was unclear if a recoil to the $21.6 resistance would commence, but if it does, it would likely be driven solely by the futures market.
Realistic or not, here’s SOL’s market cap in BTC’s terms
The spot market clearly outlined its conviction in recent days. The spot Cumulative Volume Delta (CVD) of Solana has been in a downtrend since Sunday (8 October). This heightened the chances that SOL would reach the $20.2 support zone quickly.