By Franklin Smith
The crypto market currently undergoes those weeks that uncertainty magnifies. Consequently, cryptocurrency prices have taken a bearish stance. Solana is one of the digital assets that have seen substantial retracement following the latest bullish period.
Solana has had its price actions inside an ascending channel, constricted by support and resistance. Its recent rally saw SOL retesting support beyond the $47 value area, following a nearly 50% rally.
The alternative token traded at around $37 by July 27. Nevertheless, it noted a slight recovery from the $34.67 weekly lows after a brief touch to the support level.
Solana’s prevailing zone shows the altcoin readying for further uptrends in the coming few days, presuming SOL stays constricted within the resistance and support levels.
Its RSI (Relative Strength Index) remained at the neutral level, just beneath the 50% mark, and displayed recovery signals. The weekly plunge seems to tapper out as the MFI (Money Flow Index) tried to level.
Are There Downside Risks?
The FOMC conference and the economic data might have triggered most investors to exit positions. That explains why Solana recorded a significant drop over the past seven days. Moreover, investor sentiment appears to improve in the upside favor.
Solana’s FTX funding rate bottomed at -0.0014% on July 26 before recovering to 0.0006% the following day. That shows investors within the derivatives market are purchasing. And that often reflects the spot market.
The surge in SOL’s development activity supports Solana’s improving sentiment. Investors often perceive this as an impressive signal. Thus, it may contribute to favorable investor sentiment. Nevertheless, that’s not a guarantee, especially as far as short-term tendencies are concerned.
Solana has already tested the ascending support level approximately four times. Retesting the support again will ensure weakness. Therefore, investors should remain cautious about their expectations due to the probability of breaking beneath the foothold.
Also, they should watch the broad market as its trends can define Solana’s price action. The crypto space battles to maintain the latest gains but bears will likely trigger retracements in the coming sessions. Bitcoin appears weak to sustain the $23K mark.
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