Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
The short term market structure and trend were heavily bullish. There was actual demand behind Solana’s upward move, but will it be enough to trigger a recovery in a later time frame?
Bitcoin [BTC] has worked its way up steadily over the past ten days. The drop to $16.4k was followed by a slow but steady climb. In recent hours of trading, BTC climbed past $17k, but $17.3k and $17.6k remain major bearish outposts.
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The Solana network’s on-chain stats have improved over the past few days. The number of active portfolios increased by a significant margin and development activity also increased. Still, the lack of capital flowing into the market, according to Open Interest, could give bulls a break.
Solana breaks past the highs of the previous streak and momentum remains solidly up
Solana has made impressive gains since dropping to $8 on December 30. It shifted its lower time frame structure from bearish to bullish as it jumped past resistance at $11.85 on Jan. 3. The recent move past $14 saw SOL gain nearly 32% in a day.
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Yet these gains do not represent a long-term trend. Instead, it could be the violent response to months of bearish pressure. The market is drawn to liquidity, and the sheer number of short sellers in the weeks leading up to December made it possible to hunt for liquidity in the north.
The On-Balance Volume (OBV) has increased over the past ten days. This was an indication of genuine demand for the asset. In addition, the Relative Strength Index (RSI) also showed strong bullish momentum. Therefore, it was likely that prices could go even higher. The upcoming areas of interest for Solana are the $16.1-$16.5 region and the $17.7-$18.2 resistance region.
A 4-hour bearish order was at $17.15, but the short-term trend is in favor of the bulls. Thus, traders can wait for a pullback in the $14-$15 area and watch for a bullish reaction before buying SOL in that zone.
Open Interest has recorded almost no gains in recent days, despite the rising price
The price increase earlier in January from $9.8 to $14 caused a significant spike in Open Interest. This suggested that money was flowing into the market, but at the time the spot CVD was not in an upward trend. This changed in recent days.
The OI stagnated as the price continued to rise over the past 12 hours. This could be a warning sign that the asset could top out in the short term. Nearly $6 million in short positions were liquidated on the previous trading day. Together, it suggested the possibility of a short squeeze.
This post SOL soars as it doubles in value in two weeks – more to come?
was published first on https://ambcrypto.com/sol-rockets-skyward-as-it-doubles-in-value-within-two-weeks-more-to-follow/