By Nathan Ferguson
Solana exhibited a firm bearish trend within the recent months. Meanwhile, Solana and its governance coin SOLA saw impressive growth last year. The price rallied from $1.5 in January 2022 to higher levels near $259.9. However, the token tested the $80 value area within the last few weeks, looking for demand. That had Solana surging towards the $116 – $120 territory. While publishing this blog, SOL held its price above the support of $79.4. The question now is, can SOL trigger another bounce?
Solana – 12hr Timeframe
The narrative of another bounce around the $80 zone presumed that BTC is near a local low, and SOL might mimic the trend. Nevertheless, the market is yet to confirm such a premise. Moreover, the market lacked demand. Remember, demand is a necessity for a near-term rally.
Instead, horizon trades might watch asset trends while looking for an opportunity to go short.
The Bollinger bands display volatile price actions for SOL over the recent weeks. Moreover, the price traded around the bands’ lower. That might witness contrarian investors pushing Solana to the 20 MA, which stands at $92.31 at this publication.
Reasoning
The Relative Strength Indicator could not climb past 60 even as SOL surged early in February. That way, the indicator declined beneath the neutral level (50), approaching the oversold region. The following few days can see the RSI printing a higher low despite lower lows by the alt’s price.
The Moving Average Convergence Divergence struggled to maintain beyond the zero line in its 12hr chart. The indicator displayed a bearish cross, moving beneath the zero line at this publication. The on-balance volume also declined sharply. Furthermore, selling pressure exceeded buying momentum early this month.
For now, the crypto market display recovery moves following the recent crash. Bitcoin recorded solid gains overnight, climbing towards $38,648.08. However, the market remains vulnerable to plummets due to inadequate volume amid surges.
Final Thought
Contrarian investors at low timeframes might trigger price bounces in Solana. That way, the 20SMA around $92.3 might be a lucrative level for short positions. However, fear by market players and the market structure means only savvy investors may ‘buy’ the dip until the narrative shifts.
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