Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice.
Solana had crucial support at $37.71, but this level was broken in a swift move as Bitcoin fell from $22k to $21k in four hours.
At the time of writing, Solana had a strong bearish outlook and a retest of the $38 zone could present an opportunity to short. Sellers took the wheel on July 24 and haven’t relinquished it yet, and the bleeding could continue this week.
SOL-2 hour chart
Based on the swing low and swing high at $31.82 and $47.36 respectively, Fibonacci retracement levels were plotted. The retracement level of 61.8% converged with the horizontal level at $37.71, but SOL broke through this region with strength.
The previously bullish structure was also broken last week as buyers failed to defend the $43-$44 region.
Solana has had a shorter bullish structure since early July. In mid-June, a rally was initiated from $26 to $42. It was also carried by constant demand.
In July, the bulls were able to hold onto SOL’s upward trajectory as they pushed the coin to test the $38 region twice as resistance and flip to support two weeks ago. Another leg moved up to $47, but Bitcoin was rejected at $24.1k.
Bitcoin encountered resistance from $21.6k-$21.9k, and the $22.5k areas. An upward move seemed unlikely. In terms of price, it was a similar story for Solana. SOL would likely face intense selling pressure in the $37.7 and $39.5-$40.5 ranges.
The 2-hour RSI fell below the neutral 50 level a few days ago. It also dipped below 40 in recent trading hours, signaling strong bearish momentum.
The Stochastic RSI was in oversold territory. A bearish crossover in the overbought territory a few hours later could signal the next downward move.
The OBV fell below a support level from mid-July. This once again emphasized the heavy selling pressure behind SOL. Volume favored the bears and buyers seemed unwilling to bid yet.
Strong bearish momentum was evident for Solana, and the next support levels to watch for are USD 35.15 and USD 32. A bounce to retest the USD 38 area as resistance could emerge, but such a move has to be seen as an opportunity to sell the asset.
This post Solana may face selling pressure in this area in the short term
was published first on https://ambcrypto.com/solana-in-near-term-could-face-selling-pressure-in-this-area/