Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Solana has emerged as the faster network in terms of transaction speed, according to a recent study. On the contrary, it is also a fact that the number of unique daily active signers has decreased since January.
Bitcoin has seen a massive drop in the charts in recent months and so has Ethereum. Solana was one of the large cap currencies that rose sharply in the months leading up to October last year. However, since Solana hit a high of nearly $260, it has lost value across the market.
SOL- 1 day chart
The downtrend is visible in the charts and was initiated when SOL was unable to move past the USD 260 highs but instead closed a daily session below the then USD 188 support level. It subsequently registered a lower top of the charts.
During the early February rally, the price attempted to break past the $116 resistance. It could only hit $120 before sellers forced it lower. Since then, the USD 83 support level has already been tested twice.
Since January, every test of the $83 level has resulted in bounces of successively smaller percentage gains. Repeated retests of a level weaken it further and the above level seemed to do this because consecutive bounces were weaker.
Below the $83-$70 (cyan box) demand area were the $58 and $41 support levels. Could SOL penetrate to these lows in the coming months? It is a possibility that cannot be ruled out. To break the bearish market structure, SOL needs to close a session above its most recent lower high of $107.
The indicators have not yet shown any signs of such a turnaround. The RSI struggled to climb past neutral 50, something it has been doing since mid-November. The OBV has also been declining since then.
The implication here is that the sales volume has been higher than the purchase volume. This seemed in line with the price charts. The RSI also showed that bearish momentum could continue in the coming weeks unless the market structure is breached.
The Directional Movement Index had both the ADX (yellow) and -DI (red) above 20, indicating a strong bearish trend underway.
The USD 107 level needs to be breached followed by a higher low before SOL presents the possibility of an upward move. If $81 converts to resistance, the price could move much further south, with long-term support at $58.
This post Here’s the to-do guide to Solana’s market bulls
was published first on https://ambcrypto.com/heres-the-to-do-guide-for-solanas-market-bulls/