Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is the opinion of the author only.
- Solana’s 4-hour and daily market structures are, at the time of writing, bullish.
- Range formation provides a clear game plan for buyers and sellerss.
Solana has rebounded significantly from losses in November and December, particularly at a multibillion-dollar market cap. Further gains are likely, especially based on the direction of the higher time frame. Could the breakout forecast catch the bulls before a reversal?
Read the Solana 2023-24 price forecast
The AI bot sets an upside target of $54 by 2023, but there was a long way to go for SOL. Bitcoin has not broken above $25,000 yet, and this rally was more likely the uptrend of a bear market than the start of a bull market.
A break and retest of the range tops could indicate a move higher towards $37
Source: SOL/USDT on TradingView
Solana has been trading in a range (orange) between $20.4 and $26.6, with the midpoint at $23.5 since mid-January. Above $26.6, $30.7 is the next major resistance level. However, the area of $26-27 is itself a major resistance area.
This is because it marks the lows of the range in which SOL traded from May to November. On several occasions, a retest of this area has seen Solana bounce higher. This was broken during the November accident.
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Furthermore, when bands form, they are more likely to last than explode when the ends are retested. This means that a return to $26.6 would offer a selling opportunity, with a stop loss above $27 and a profit take in the middle of the $23.5 range.
Closing the session above $27 and retesting the $26 belt would reverse this bias. In this case, buyers can buy into the breakout and use $30.7, $33, and $37.3 to take profit at.
At press time, the RSI is showing some bullish momentum with a reading of 56, while the OBV has seen smaller gains over the past three days.
Open interest saw an upward movement after SOL’s bounce from $23
Source: Coinalyze
The 1 hour chart of Solana on Coinalyze showed CVD starting to gain momentum in the past few days. This is to confirm buying pressure in the market. It was an encouraging development, especially as SOL is near the $26 resistance.
The expected financing rate has remained positive since mid-January. At the same time, the open interest rate rose with the SOL rebounding from $23, which was a sign of bullish intent. A sustained rally in OI is likely to follow a break above the range.