Solana flipped the $152-level to support – A minor victory for the bulls
Investors might be concerned by the lack of buying volume in recent weeks
Solana [SOL] saw a large inflow of tokens to the centralized exchange Binance last week. In fact, 2.8 million in SOL inflows saw the price drop by 7% from $155 to $143. The funding rate, which had been negative, turned positive on 08 June.
And yet, the bearish momentum of the past three weeks was very evident. Despite these short-term gains, investors should not expect an explosive rally for Solana yet. Meanwhile, traders can utilize the momentum shift to look for profitable positions.
Source: SOL/USDT on TradingView
On the 1-day chart, the structure of Solana was bearish since mid-May. It retested the $143 support once again – A level that it flipped to support back in April. Since this retest, SOL has rallied 8.5% in three days, outlining the strength of the demand zone.
The MFI showed momentum was bearish and selling pressure had the upper hand at press time. The volume bars’ 20-day moving average has also trended slowly lower over the past two weeks, during the retracement to $143.
The volume needs to pick up to give a strong sign that a move to $178 or higher was likely. The OBV has not yet done that though and instead, it has been moving south for a month.
Source: SOL/USDT on TradingView
Zooming in to the 4-hour chart, the OBV’s downtrend was evident. The descending trendline (orange) appeared to be on the verge of being breached, but had not done so yet. A move past the local high from earlier in June on the OBV would be an early sign of buyer dominance.
At the time of writing, the MFI was trending higher over the past three days, alongside the price bounce. This suggested buying pressure and bullish momentum in the short-term. And yet, the SOL H4 market structure was bearish.
During the downtrend from $178 to $143, a lower high was made at $162 earlier in June. A Solana price move beyond this level would encourage swing traders to go long, using the market structure shift to reinforce their bias.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
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