Disclaimer: The findings of the next evaluation are the only real opinions of the author and shouldn’t be thought of 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 aid rally is across the nook? In a means, that aid 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 prior 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 properly after the $94.9 stage of help gave means in late April.
Will SOL reverse its development at this excessive timeframe demand zone? It’s unlikely, regardless of the sturdy bounce. On the decrease timeframes, the $74-$76 space might provide resistance, in addition to the $80.5 stage.
Rationale
Supply: SOL/USDT on TradingView
On the two-hour chart, the RSI has been under the impartial 50 line for the higher a part of the previous week. On the identical time, the value has made a collection of decrease highs and decrease lows. Furthermore, the 21-period shifting common (orange) has been under the 55 SMA as properly. All of those have been indicative of a persistent downtrend prior to now two weeks.
The RSI additionally registered a hidden bearish divergence, the place the RSI made greater highs however the value fashioned decrease highs. This improvement on the hourly chart additionally recommended that the downtrend might resume the next day.
The Chaikin Cash Move was beneath the -0.05 mark as properly, to indicate vital capital movement out of the market. This was to be anticipated, after the sturdy downtrend of the previous few days and the heavy promoting stress the day prior to this. Correspondingly, the A/D line was additionally plumbing new depths.
Conclusion
The indications unanimously confirmed sturdy bearish momentum and heavy promoting stress, and the value motion was additionally of a bearish nature. The bounce from the $65 space might push as excessive as $75. To the north, the $75 and $80 areas are more likely to pose resistance to the bulls’ makes an attempt at restoration.