Solana temporarily drops to five-month low, and traders can bet on a recovery

warning: The results of the following analysis are the author’s opinions only and should not be considered investment advice

  • Range formation presents a viable buying opportunity for traders
  • Bitcoin’s drop from $21.4K complicates the bullish notion as conditions may be risky for buyers

Over the past weekend, Solana’s price increased from $30.9 to $37, a move of around 20%. This move quickly reversed and SOL broke the $31 support the day before. It has fallen into an area where traders of longer time frames can be interested in bidding on the asset.

This is the AMBCrypto price prediction for Solana [SOL] 2022-23

Bitcoin will need to recover Solana’s $20.8000 and $20.8000 levels to provide a more acceptable short term outlook for the bulls. In the meantime, long-term investors may consider buying Solana near the low that extends into late May.

Mid-term resistance remains undefeated, and all eyes are now on $26

Source: SOL / USDT on TradingView

Solana formed a range between $47.5 and $26.4. The midpoint of this range was $37, a level that has acted as resistance since mid-August. The recent rally failed to break the $37 barrier, its third attempt in as many months.

The 12-hour RSI fell below the neutral 50 level to show that the momentum was in the hands of the sellers. Stochastic RSI also fell towards the oversold territory. Trading volume in recent days has been much higher than on any day in October.

To illustrate this fact, OBV declined rapidly almost overnight. It broke below the support level in mid-October. Additionally, OBV has formed lower tops since August. This indicates that Solana has not seen strong demand in recent months.

In the absence of buying pressure, the bounce from the lower range may not be strong. $26-$26.5 could provide a buying opportunity on retest, but traders should be careful to take profits when the price bounces. $30 and $37 are the key resistance levels that bulls are turning to for support.

The degree of financing makes the fuse go south and social domination leads to higher

Solana price temporarily drops to five-month low, can traders bet on a recovery?

Source: feeling

The financing rate also reflects the high volume of selling in the last hours. The scale fell very sharply on DyDx to show that market participants were significantly bearish.

Social dominance has also seen a sharp rise in recent days. However, the increase was not enough to match that seen in the past six months. The number of NFT trades was also close to the lowest it could be. Last month averaged dozens of NFT trades per day.

A bounce can be achieved from the lows of the range. However, Bitcoin was trading at less than $20,000 and had significant resistance at $20.2000 by itself. BTC drop could lead to another drop for Solana.

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