Disclaimer: The information presented does not constitute financial, investment, trading or other type of advice and is solely the opinion of the author
- Market structure is bullish, but buying volumes are not encouraging.
- Solana is trading in a key resistance zone and may face rejection.
Over the past two days, Solana appears to have reversed its bearish trajectory since late February. This is the trend across the cryptocurrency market following the short-term bullish sentiment behind Bitcoin in the early hours of Monday.
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Is this the start of an uptrend, or a pocket of liquidity before a reversal? Monday’s highs and lows often provide information about the direction of the next week.
Traders can also incorporate this information before formulating a plan of action regarding Solana.
Confluence of bearish breakout and range low could hurt SOL bulls
At the time of writing, Solana was trading at $19.68 and retesting the previous range low as resistance. The range is highlighted in orange, and Solana traded within it from mid-January until it broke below it on March 7. The range expanded from $20.5 to $26.6.
Solana is up 28.6% from SOL’s low of $16 over the weekend. The RSI is also above the neutral 50 and shows strong bullish momentum.
However, OBV failed to form a higher high, suggesting that buying pressure has subsided slightly during the past three-day rally.
Although volumes have been high over the past few H4 sessions when Solana made these gains, the trend has yet to reverse. From a technical standpoint, the market structure is bullish as the recent lower high at $18.9 has been broken.
How much is 1, 10 or 100 SOL worth today?
However, the $20 area represents resistance at the range low and a bearish breakout from February. Therefore, shorting the asset could attract interest from aggressive bears. Heading south, $18.5 and $16.6 can be used to book profits.
Open interest tells a story of bearish sentiment turning bullish
Spot CVD has been flat over the weekend after seeing some buying pressure on March 10. The recent moves have not sparked a rise in CVD. Meanwhile, the funding rate remains negative, suggesting that short positions paid out long positions.
This highlights the bearish sentiment behind Solana.
Open interest rose in the past few hours and fell when the price encountered resistance at the $20 mark. This could indicate a bullish sentiment over the past few hours.
Source of information: Compiled from AMBCRYPTO by 0x Information.Copyright belongs to the author, without permission, may not be reproduced