By AMB Crypto - 4 months ago - Reading Time: 2 minutes
Solana’s 14% price fall, prediction, and how you can profit from the dip
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Higher and lower timeframe trends of Solana prices seemed to be at odds, suggesting a bullish reversal could soon occur Lack of selling volume recently meant that the pullback could be shallowSolana’s [SOL] network saw a significant increase in social media engagement recently. A large part of this can be attributed to the Jito [JTO] airdrop. As a result, the DEX volume on Solana’s network also saw a huge uptick.
Solana’s NFT sales also jumped higher last week. In fact, AMBCrypto’s recent report had also noted a rise in network activity, with the Solana blockchain ranked number 1 for total transactions in November. Despite these developments, however, the token saw a pullback recently on the price front.
Breakout past November’s range could be wholly retraced
Source: SOL/USDT on TradingView
A range that Solana traded within for the most part of November was marked in yellow. It climbed from $51.1 to $64. On 7 December, SOL broke out past the range highs and made it to $77.78. Alas, it has declined since then.
The RSI fell below neutral 50 to show a shift in momentum in favor of the bears and the On-Balance Volume (OBV) also trended downwards over the last three days. This suggested that selling volume was stronger. The volatility on Monday saw a candlewick to $64.18 on the 2-hour chart which saw a quick bounce.
And yet, the two-hour timeframe signalled a bearish market structure. The move below the recent higher low at $70 (orange) marked this shift in structure. The Fibonacci retracement levels (cyan) plotted based on the rally from the range highs noted that $63.11 and $66.24 could be levels where a bullish reversal could happen.
Drop in Open Interest illuminated market participants’ sentiments
Source: Coinalyze
The last two days of trading saw Solana’s price slowly decline from $7.78 to hit $70. This was accompanied by a fall in Open Interest (OI). The inference from the drop in OI and prices is that market participants are losing their bullishness.
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Surprisingly, the spot CVD has trended higher. This is a sign of healthy demand for the token in the spot markets, even though the short-term sentiment has been bearish. Therefore, the recent pullback could be temporary and shallow. On the higher timeframe charts, the $60-$65 zone represents a support zone that could see bulls initiate a recovery.
Original source: AMB Crypto