Solana (SOL), the star of the crypto world, has seen a decline in momentum as it fell below the support level of $22.4 and the consolidation of the upward order block (OB) in the past 48 hours. This happened after the level failed to withstand selling pressure following the price dropping to the $19 region.
Despite the downward trend, bulls attempted a quick recovery with a 7% gain in the last 12 hours. However, there is a critical obstacle ahead of the upward movement at the new resistance level ($22.4). Can Solana bulls sustain the buying pressure to reverse the recent losses?
Solana’s downward trend has seen sellers reversing two significant support levels last month. First, there was a loss of support at $25.3 at the end of July. While bulls defended the $22.4 level, this level succumbed to selling pressure on August 17. The reversal of the latest support level was crucial as it indicated a change in momentum in higher time frames by breaking the previous low level.
Despite bears taking control, market conditions seem to be recovering with Bitcoin trading at $26,000 as of the time of writing. This could help bulls quickly regain the $22.4 price level. On the other hand, if selling pressure persists, a retest of the $22.4 level could offer new short-term gains as sellers target the $18-20 price range.
Meanwhile, a short-term bullish recovery was accompanied by an increase in the Relative Strength Index (RSI) to 43, indicating rising buying pressure. Similarly, the Chaikin Money Flow (CMF) turned positive with a value of +0.06, signaling increased capital inflows.
Data from Coinglass showed that sellers have a higher probability of increasing their gains. The long/short ratio revealed that shorts held 52.27% of all open SOL contracts, contrary to the 47.73% held by longs in the 12-hour timeframe.
With a difference of $18 million in open positions, sellers remained confident in continuing the downward trend. However, as an upward trend can reverse the downward trend, investors should actively monitor Bitcoin’s price movements.