Disclaimer: The findings of the next evaluation are the only real opinions of the author and shouldn’t be thought-about funding recommendation
Bitcoin reached lows that it had final traded at in July 2021, and Solana reached an space of demand from final August. Does that imply a reduction rally is across the nook? In a manner, that reduction was already seen on the charts. Solana dropped as little as $60.13 earlier than bouncing to $70.17, a transfer that measures round 21% from the swing low. It appeared that the bears might be again within the driving seat as soon as extra.
SOL- 2 Hour Chart
Supply: SOL/USDT on TradingView
The cyan field extends from $66 to $71 and has been an space of demand up to now. In August 2021, the value flipped this area from resistance to help and rallied to succeed in $216 and $260 in September and November respectively.
Since late November, the value has been on a downtrend on the upper timeframes. The development has been bearish on the shorter timeframes as nicely after the $94.9 degree of help gave manner in late April.
Will SOL reverse its development at this excessive timeframe demand zone? It’s unlikely, regardless of the robust bounce. On the decrease timeframes, the $74-$76 space may provide resistance, in addition to the $80.5 degree.
Rationale
Supply: SOL/USDT on TradingView
On the two-hour chart, the RSI has been beneath the impartial 50 line for the higher a part of the previous week. On the similar time, the value has made a collection of decrease highs and decrease lows. Furthermore, the 21-period shifting common (orange) has been beneath the 55 SMA as nicely. All of those had been indicative of a persistent downtrend up to now two weeks.
The RSI additionally registered a hidden bearish divergence, the place the RSI made increased highs however the worth fashioned decrease highs. This improvement on the hourly chart additionally urged that the downtrend may resume the next day.
The Chaikin Cash Circulation was beneath the -0.05 mark as nicely, to indicate vital capital circulate out of the market. This was to be anticipated, after the robust downtrend of the previous few days and the heavy promoting stress the day gone by. Correspondingly, the A/D line was additionally plumbing new depths.
Conclusion
The indications unanimously confirmed robust bearish momentum and heavy promoting stress, and the value motion was additionally of a bearish nature. The bounce from the $65 space may push as excessive as $75. To the north, the $75 and $80 areas are prone to pose resistance to the bulls’ makes an attempt at restoration.
