Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is the opinion of the author only
- The previously bullish order block in the $15 region prevented the Solana bulls from advancing
- Low open interest means that futures traders did not expect a rise
Since mid-November, Solana bulls have been repeatedly pushed from the $15 resistance area. Technical indicators are yet to show strong bullish momentum or significant buying pressure behind SOL yet.
Read Solanas [SOL] Price forecast 2023-2024
A new article highlights why the $15 tag is so important. Here we take a look at what short sellers might look like to trade SOL, and how this bearish view can be invalidated.
The bearish H4 break has yet to be broken and may provide a selling opportunity
In the four-hour chart, the RSI has fallen below the neutral 50 level, standing at 44 at press time. However, this did not show a declining trend. Meanwhile, Off balance Volume (OBV) has not changed over the past two weeks either. Chaikin Money Flow (CMF) was at -0.05, and any move down would be an indication of significant selling pressure in the market.
The price action on lower timeframes such as 1 hour showed no definite trend. Solana has bounced between values of $13.14 and $15 since November 23, with two people dropping to the $12.8 level.
At the time of writing, Bitcoin ventured to $16.7000 but quickly rallied as demand increased. Further gains and a move above $17,000 could also see SOL gains. But based on the SOL diagram, the possibility of a short circuit was more obvious.
This was due to the confluence of a bearish break on the 4-hour time frame along with the range tops at $15. The range 14.5 USD – 15 USD can be used to enter short positions. This idea would be negated by a four-hour session close above $15.6. Meanwhile, to the south, the $13.15 and $11.3 levels can be used to take profits.
Futures traders weren’t excited about the prospect of a SOL breakout
Since November 24, open interest behind Solana has waned. Although SOL tested the bearish break several times and the price consolidated below the $14 level over the past two weeks, the OI fell from $298M to $217M.
In the event of a break above $15, OI is likely to see a significant move higher. This can alert sellers that the downwind has shifted.