Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
Solana’s H4 price chart underlined the bullish strength. The week ahead could be green, but there was evidence to support the idea that SOL was facing a dip.
An earlier analysis report indicated that Solana [SOL] traded above the key level at $18.7. At that time, the bullish strength was not evident on the higher timeframes, but the lower timeframe chart was clearly bullish. Buyers have maintained their momentum over the past two days.
Read Solana’s [SOL] Price Forecast 2023-24
At the time of writing, SOL prices were below the key level of $22.3. A move above this mark would flip the daily structure to bullish, which could result in a Solana rally in the coming weeks. Patience can be vital for traders looking to build swing positions.
The daily lower high could provide significant resistance for the Solana bulls
On the 4-hour chart, Solana showed strong bullish momentum over the five days. By the end of June, the price had jumped past the resistance and daily bearish order block into the $18.5 zone. After it flipped to support and was tested again, demand started to pick up.
This drove Solana to the $22.3 level for the past three days. The OBV was evidence of the increase in demand as higher purchasing volume drove up prices. The market structure and trend on the 4-hour chart was clearly bullish.
However, that doesn’t mean a breakout above $22.3-$22.5 was imminent. After the sell-off in mid-May, SOL pumped into this region before reversing the trend with a vengeance. Therefore, sellers were likely to defend this level dearly. Therefore, SOL traders should be prepared for the possibility that SOL could form a range between $22.3 and $19.9 or even $18.5. On the other hand, a break and retest of the $22.3 would be a welcome buying opportunity for swing traders.
The short-term weakness of the Open Interest gave bears an advantage
While the 4-hour price action emphasized bullish strength, the 1-hour Open Interest chart could spell bears in the upper hand. In the last 18 hours, the OI started to fall. Meanwhile, SOL prices saw a drop to $21.42 but recovered to $22.25 at the time of writing.
Realistic or not, here is the market cap of SOL in terms of BTC
Despite the recovery, the OI remained flat, with uninterested bulls and a potential shift in momentum. Combined with the $22.3 resistance, this finding suggested that Solana prices could fall. However, the spot CVD has remained positively sloped over the past two days to highlight strong demand for the token.
This post The chance of a Solana rally in the coming weeks is…
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