Solana (SOL) has been indicating a risky buying opportunity for short-term investors. The trend and market structure in larger time frames had a bearish inclination, but analysis of the 4-hour and 1-hour charts pointed towards a possible price spike.
Bitcoin (BTC) managed to reach $31,300 on June 23, the highest level it has attained in 2023. The previous local peak was $31,000 in April. This has revealed bullish expectations, but the price action of the previous week showed that a retracement should not be overlooked. This has rendered the crypto market riskier, and traders may be ready to cut trades on potentially invalid transaction expectations.
Will Solana Rise?
The 4-hour structure was pointing downwards. After Solana SOL rose to the $17.75 level, it created a higher bottom at $16.16 on June 23. Since then, the price fell, reaching $15.89 on June 27. A series of lower peaks also formed as a result of these price movements.
This may have indicated SOL’s entry into a downward trend. The Directional Movement Index -DI (red) was at 25, and the ADX (yellow) was at 19.54. An ADX over 20 signifies a strong downward trend. Meanwhile, the RSI was also below the neutral 50, showing downward momentum. The CMF was falling but still indicated significant capital inflow with a +0.06 sign.
A series of Fibonacci retracement levels were drawn based on SOL’s jump from $12.8 to $17.75. The 50% retracement level was shown to be at $15.28. It seemed to represent an opportunity for investors wishing to enter long positions, deemed invalid under $14.88. In the upper region, the 4-hour trading block displaying a bearish trend at $18.7 aligned well with the 23.6% extension level at $18.92.
Latest on Solana
When Solana’s price fell from $17.1 to $16.08 on June 26, the Open Interest started to increase. The OI approached $20 million, indicating significant short selling and a strong bearish sentiment in the market a few days ago.
However, spot CVD began to show an upward trend. In the last 24 hours, while CVD slightly rose, the OI stayed horizontal despite short-term volatility. Together, they indicated that the market sentiment remained in favor of sellers.
