Key levels for Solana bulls and bears to plan their next moves

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

  • The 4‑hour and dai­ly mar­ket struc­tures of Solana, at press time, were bullish.
  • The range for­ma­tion gives out a clear game plan for buy­ers and sell­ers.

Solana has recov­ered remark­ably from the loss­es it post­ed in Novem­ber and Decem­ber, espe­cial­ly for a multi­bil­lion-dol­lar mar­ket-cap asset. Fur­ther gains are like­ly, espe­cial­ly based on the high­er time­frame trend. Is it pos­si­ble that the expec­ta­tion of a break­out will trap bulls before a reversal?

Read Solana’s Price Pre­dic­tion 2023–24

The AI bot sets a bull­ish tar­get of $54 in 2023, but there was a long way to go for SOL. Bit­coin hasn’t bro­ken above $25k yet, and this ral­ly was more like­ly to be a bear mar­ket ral­ly than the begin­ning of a bull market.

A breakout and retest of the range highs could signal a move up to $37

Solana bulls eagerly anticipate a breakout- but should you look to short SOL?

Source: SOL/USDT on TradingView

Solana trad­ed with­in a range (orange) between $20.4 and $26.6, with the mid-point at $23.5 since mid-Jan­u­ary. Above $26.6, $30.7 is the next major resis­tance lev­el. How­ev­er, the $26-$27 region itself presents a sig­nif­i­cant zone of resistance.

This is because it rep­re­sents the lows of a range that SOL trad­ed with­in from May to Novem­ber. On mul­ti­ple occa­sions, a retest of this zone saw Solana bounce high­er. This was bro­ken dur­ing the Novem­ber crash.

Is your port­fo­lio green? Check the Solana Prof­it Calculator

More­over, when ranges form, they are more like­ly to con­tin­ue than to break­out when the extremes are retest­ed. This meant that a move back to $26.6 will offer a short­ing oppor­tu­ni­ty, with a stop-loss above $27 and take-prof­it at the mid-range of $23.5.

A ses­sion close above $27 and a retest of the $26 belt would flip this bias. In that case, buy­ers can long a break­out and use $30.7, $33, and $37.3 to take prof­its at.

At press time, the RSI showed some bull­ish momen­tum with a read­ing of 56, while the OBV saw minor gains in the past three days.

The Open Interest saw an upward move after SOL’s bounce from $23

Solana bulls eagerly anticipate a breakout- but should you look to short SOL?

Source: Coin­a­lyze

The 1‑hour chart of Solana on Coin­a­lyze showed the spot CVD began to pick up over the past few days. This, in order to under­line buy­ing pres­sure in the mar­ket. It was an encour­ag­ing devel­op­ment, espe­cial­ly as SOL is close to the $26 resistance.

The pre­dict­ed fund­ing rate remained pos­i­tive, as it has since mid-Jan­u­ary. Mean­while, the Open Inter­est spiked upward along­side SOL’s bounce from $23, which was a sign of bull­ish intent. A con­tin­ued rise in OI will like­ly be fol­lowed by a break­out above the range.

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