Solana (SOL) saw an update to its validator client, Solana v1.16, released on October 6th. From a price action perspective, experts believe that Solana has a chance of recovery, but the sentiment is bearish in the short term.
Solana Analysis Reports!
According to the technical analysis report released on October 5th, Solana highlighted the importance of $22.5 as a significant support level. To attract the attention of bulls towards the area where SOL could recover, a $22 FVG was emphasized on the 12-hour chart.
At the time of writing, SOL was trading just above $22, but the technical indicators were showing a short-term bearish trend. While Solana showed a downward trend on the 4-hour chart, it demonstrated a strong upward trend on the daily chart. The movement above $20.6 was critical, and bulls quickly raised the prices to $25 ten days ago, which could be a strong signal of an upward intention.
The Fibonacci retracement levels were drawn based on SOL’s rise from $12.8 to $32.13 in June and July. The 78.6% retracement level was at $16.94, which was almost tested by SOL on September 11th before moving higher. Bulls gave up the 50% level at $22.47. This was accompanied by a drop below the neutral 50 in RSI and a drop below -0.05 in CMF. The indicators together highlighted the downward momentum and significant capital outflow from the market.
SOL Price Movement!
OBV experienced a decline last week, but this was only a retracement compared to the gains it made in late September. The funding rate was negative for a large part of October as investors expected SOL to follow its major rise in September. The past two days have seen both the price and open positions decline, indicating a bearish trend.
The spot CVD was a sign that the demand for Solana was not yet very high. Short-term investors may wait for these conditions to change before making a purchase. The $21.28-$22.05 range served as resistance in August and during the September rally. It was retested as support in the past hours. Therefore, it was likely that a SOL rally would be initiated in the near future. Hence, bulls may have to wait for the token for a long time, but risk management is crucial.
