Solana [SOL] is up by 10%, but here’s the ‘but’ of it all

Please fol­low and like us:
Pin Share

Dis­claimer: The infor­ma­tion pre­sent­ed does not con­sti­tute finan­cial, invest­ment, trad­ing, or oth­er types of advice and is sole­ly the writer’s opinion

  • SOL has a bull­ish mar­ket structure
  • Neg­a­tive sen­ti­ment and a decline in devel­op­ment activ­i­ty could favor a price correction 

Solana (SOL) record­ed impres­sive mid-week price gains, up by 10% at the time of writ­ing. After the FTX expo­sure and sub­se­quent implo­sion, SOL’s ral­ly fol­lowed a pre­vi­ous mas­sive dump. It was trad­ing at $14.49, still low­er than 50% of its pre-FTX saga val­ue, at the time. 

You might be hap­py with the recent gains if you bought SOL’s dip. How­ev­er, a pos­si­ble price cor­rec­tion to this lev­el could be in the off­ing too. 


Read Solana’s [SOL] Price Pre­dic­tion 2023–24


If buy­ers lose momen­tum, a price cor­rec­tion could drop the alt­coin below the 38.2% Fib lev­el and set­tle at $13.67. A retest of this pull­back zone could pro­vide buy­ing oppor­tu­ni­ties and entry posi­tions for a long trade. 

SOL faces a bearish order block; can the bulls get around it?

Source: SOL/USDT, TradingView

The FTX implo­sion set SOL on a free fall, but the bulls have found rest­ing places at three key sup­ports since ear­ly Novem­ber. These include $13.67 and Fib retrace­ment lev­els at 23.6% ($12.89) and 0% (11.03). 

Two price recov­ery attempts on 14 Novem­ber saw a price cor­rec­tion to the pull­back lev­el of $13.67. How­ev­er, anoth­er price recov­ery attempt on 16 Novem­ber end­ed in a price cor­rec­tion, one that broke the pre­vi­ous sup­port and estab­lished $11.03 as a new sup­port level. 

The lat­est price ral­ly began on Wednes­day, 22 Novem­ber, but it may not break through the resis­tance and bear­ish order block at the 50% Fib retrace­ment ($14.97). The Rel­a­tive Strength Index (RSI) was point­ing south from the over­bought entry line. This could indi­cate a slight decline in buy­ing pressure. 

Although the On-Bal­ance Vol­ume (OBV) hit high­er highs over the last two days, it could not yet reach the ear­li­er lev­els that broke the 50% Fib lev­el. Thus, sell­ers could take con­trol again if buy­ing pres­sure con­tin­ues to wane and force SOL into a price correction. 

The pull­back lev­el for this pos­si­ble price cor­rec­tion could be $13.67. How­ev­er, since this lev­el has already been test­ed four times, it could also be breached, push­ing SOL back to the 23.6% Fib lev­el ($12.89).  

How­ev­er, a can­dle­stick close above the 50% Fib lev­el ($14.97) would inval­i­date the bear­ish bias. In this case, a retest of this lev­el as sup­port could bring SOL on anoth­er uptrend with $15.90 as a new target.

Negative sentiment and decline in development activity

Source: San­ti­ment

SOL record­ed a sharp decline in devel­op­ment activ­i­ty and neg­a­tive weight­ed sen­ti­ment, as per San­ti­ment. The pes­simistic out­look based on weight­ed sen­ti­ment was reflect­ed in the deriv­a­tives mar­ket as Binance fund­ing rates fell into neg­a­tive territory. 

The bear­ish sen­ti­ment in the deriv­a­tives mar­ket could spill over to the spot mar­ket and drag SOL into a price cor­rec­tion. There­fore, investors should fol­low the sen­ti­ment on SOL, in addi­tion to the per­for­mance of the BTC.

Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published.