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- The short-term market structure and momentum was strongly bullish at the time of writing.
- Spot CVD is down, which means sellers have the upper hand.
Solana [SOL] Sellers have been in control since mid-December. They forced a drop of almost 42% in two weeks, dropping from $15 to $8.8. Meanwhile, Bitcoin [BTC] It hovered around the $16.6k level, unable to make a decision.
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Solana shorts have been pressing with a vengeance in recent days, and more bears could be spotted in the coming days. Although SOL lacked significant demand, the lack of supply was perilous.
Previous range lows have been retested – another upward move cannot be ruled out
From November 22nd to December 27th, Solana traded between $11.3 and $15. It also had a support level at $9.93. In late December, intense selling pressure pushed SOL down to $8. However, this decline was followed by a large short squeeze.
After the $9.93 level turned into support, SOL saw another bullish top, which sent the price down to previous lows in the last few hours of trading. The Relative Strength Index (RSI) has shown a strong bullish momentum in recent days. The move above the $10.78-$11.12 region indicated that Solana could move higher.
On Balance Volume (OBV) has increased over the past three days, but has encountered resistance nearby, similar to how the price encountered resistance at the $11.3 mark. The upward movement of both OBV and the price could see another push higher towards the mid-range mark at $13.15.
Despite the increase in OI, CVD remains unconvincing
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The Spot CVD didn’t inspire bullish confidence. A negatively sloped CVD made sellers dominant throughout the month of December. This has shifted to a more neutral stance in recent days, but CVD continues to see a bearish bias. The liquidation graph showed that a large number of short positions had already been liquidated.
The market structure has been bullish on the lower timeframes, and open interest has also increased. With CVD showing a lack of demand, the conclusion was that a strong uptrend is unlikely to be established on the higher time frame. However, it does not rule out another move to $13, or even higher, to clear out more short positions.