Solana (SOL) has been trading within a range formation since June 10th, experiencing a recent double boost. The first boost came from Bitcoin’s upward movement, while the second was driven by Solana’s impressive performance in the NFT space. However, the price action has reached the range-high at $16.11, prompting potential retracement scenarios.
Solana’s Consolidation and Retracement Possibilities :
Solana’s price action has currently reached the range-high of $16.11. Meanwhile, Bitcoin focuses on the $27k mark, but if bulls falter, SOL may retrace to previous support levels. At press time, the Relative Strength Index (RSI) is above the 50-mark but has registered a slight downtick, indicating a reduction in recent buying pressure. Similarly, the Accumulation/Distribution indicator has retraced slightly, suggesting a pause in accumulation.
Key Support and Resistance Levels :
Should Bitcoin fail to surpass $27k, Solana could retrace to the mid-range of $15.24 or even revisit the range low of $14.4. Notably, the mid-range has previously acted as a rescuer for bullish momentum. Beneath lies a significant resistance level from November/December 2022, at $14.93. A likely rebound between $14.93 and $15.24 could present an enticing buying opportunity for traders.
Opportunities for Rebound and Secondary Buying :
On the other hand, if BTC crosses $27k, a retest of the breakout level at the range-high of $16.11 may occur. Combined with Solana’s positive momentum, this scenario could offer secondary buying opportunities, with a target of $17.33, near the March swing low. Traders should closely monitor Bitcoin’s performance alongside Solana’s price action to identify optimal entry points.
Cumulative Volume Delta and Open Interest Analysis :
The Cumulative Volume Delta (CVD), which tracks buying and selling volumes and overall sentiment, has shown improvement on the 1-hour chart since June 18th. However, the metric has moved sideways, suggesting a temporary easing of buying pressure. Open interest rates have also remained relatively stable below $160 million, signaling the need for caution amidst potential bearish sentiment.
Solana’s range formation continues to shape its price action, presenting both retracement possibilities and potential buying opportunities. Traders must monitor Bitcoin’s movements and key support/resistance levels for informed decision-making.