Disclaimer: The findings of the following analysis are the authors’ sole opinions and should not be considered investment advice.
Solanas [SOL] recent drop below the 38.2% Fibonacci support caused a robust drop to the 61.8% level. The two week trendline support (white, dashed) muted the recent retracements in the four hour time frame.
A rebound in Pitchfork’s median (red) could open doors for a near-term jump before sellers step in. At the time of writing, SOL was trading at $32.1975.
SOL 4-hour chart
The reversal of SOL from the $42 mark has pulled the alt below the 20 EMA (red) and the 50 EMA (cyan). The convincing bearish crossover of these EMAs has also hampered the ability to buy back in the near term.
The immediate trendline support could help buyers avoid further withdrawals. A convincing close above the 61.8% level could help buyers test the $34-$35 range.
However, an immediate close below the USD 31 level could exacerbate the current selloff towards the USD 30 zone before a likely pullback occurs.
The Relative Strength Index (RSI) has been unable to find a point beyond the 40 mark resistance in recent days. Given the southerly tendencies, buyers still have a long way to go to turn the broader outlook in their favour.
Nevertheless, the lower troughs of the On Balance Volume (OBV) over the past day have created the possibility of a bullish divergence with the price. Also, traders/investors should look for a strong MACD crossover to determine the near-term comeback opportunity.
SOL Daily Chart
On a relatively longer time frame, SOL saw a breakdown in its up-channel (white). This decline led to a drop below the baseline (green) of the Bollinger Bands (BB), reaffirming the strong bearish outlook.
A lingering close below the 61.8% level could see it drop towards USD 28-$31 in the coming days. An inability of buyers to test the $34 zone would fuel ongoing bearish trends.
Given the confluence of support in the $31 zone, SOL could continue a test of the $34-$35 range in the near term. But from a longer perspective, the bears would aim to move towards the $30 zone unless buyers increase buying pressure. The objectives would remain the same as stated above.
Finally, investors/traders should keep a close eye on Bitcoin’s [BTC] movement to determine its effects on broader sentiment.
This post Solana [SOL]: Rebound from Pitchfork’s median could open doors for…
was published first on https://ambcrypto.com/solana-sol-could-see-an-extended-retracement-before/