If Solana [SOL] defends this zone, probability of a move higher would be high

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Dis­claimer: The find­ings of the fol­low­ing analy­sis are the sole opin­ions of the writer and should not be con­sid­ered invest­ment advice.

Despite the strong bounce from the $18k lows, Bit­coin [BTC] has a bear­ish out­look on the longer time­frame charts. In order to ini­ti­ate a recov­ery, BTC would need to climb past the $23k mark and stay above.

Yet, even though Bit­coin lan­guished near the $20k mark, Solana [SOL] has been able to post decent gains in the past cou­ple of weeks. At press time, it appeared to retest a for­mer sup­ply zone as demand and pre­sent­ed a buy­ing opportunity.

SOL- 12-Hour Chart

Solana rejected at $42.5, but here is why the bulls might still have some fight left in them

Source: SOL/USDT on TradingView

The Fibonac­ci retrace­ment lev­els were drawn from the swing high at $59.31, and the swing low at $25.86. Pre­ced­ing this move, April and May had been extreme­ly bear­ish for Solana. The asset was trad­ing at $140 in ear­ly April but lat­er saw a relent­less tum­ble to take it to the $25 area.

The retrace­ment lev­els showed that the 38.2% and 50% retrace­ment lev­els have act­ed as resis­tance in the past week. More­over, at press time, the price appeared to be retest­ing the $38.64 lev­el as support.

In addi­tion, ear­ly in June, the $36.8-$38.8 had served as an area of demand. SOL saw a swift bounce from this area as high as $44, before slump­ing low­er yet again. There­fore, in the next few days, this same area could act as demand once more and SOL might be able to ral­ly. To the north, the $47-$49 was a stiff resis­tance zone.

Rationale

Solana rejected at $42.5, but here is why the bulls might still have some fight left in them

Source: SOL/USDT on TradingView

On the H12 chart, the RSI climbed back above the neu­tral 50 line a few days ago and retest­ed it as sup­port. This hint­ed at the shift in momen­tum from bear­ish to bull­ish. Short­ly there­after, even the MACD man­aged to force its way above the zero line.

Togeth­er, the infer­ence was that the momen­tum had shift­ed in favor of the buy­ers. But what of the OBV? On the OBV, there was a slight upward move­ment in the past ten days. Hence, buy­ing vol­ume has been weak but present.

It was able to rise above pre­vi­ous resis­tance at the white line, which was mild­ly encour­ag­ing. How­ev­er, strong demand was not yet present, so long posi­tions need to remain extra vigilant.

Conclusion

The over­all pic­ture remained bull­ish for Solana. Was this a rever­sal of the down­trend from April? No, yet, a move toward $50 could be around the cor­ner. If SOL can defend the $37 demand zone, anoth­er move high­er would be more like­ly for Solana.

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