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Could Solana see a bounce here as it approaches a demand zone

Could Solana see a bounce here as it approaches a demand zone

Disclaimer: The findings of this evaluation are the only real opinions of the author and shouldn’t be thought-about funding recommendation

The pattern in current months for Solana has been firmly bearish. In 2021, Solana and its native token SOL skilled great progress. The value climbed from $1.5 originally of 2021 to $259.9 at its zenith. Previously few weeks, the $80 space was examined looking for demand, and SOL climbed again to the $116-$120 space. At press time, the worth was as soon as once more simply above the $79.4 help stage. Probably the most pertinent query right here is- Can one other bounce arrive?

SOL- 12H

Could Solana see a bounce as it approaches a demand zone

Supply: SOL/USDT on TradingView

The premise for yet one more bounce from the $80 space (cyan field) is the belief that Bitcoin could be close to an area backside, and Solana may observe its lead. Nevertheless, this was not but proved to be the case, and demand was merely not current. Demand is the prerequisite for a short-term rally.

As an alternative, longer time horizon merchants could be way more snug making mates with the pattern. That meant in search of a chance to brief SOL.

The Bollinger bands (blue) confirmed that the worth has been risky in current weeks, and likewise the worth was buying and selling close to the decrease of the 2 bands. This might see contrarian merchants push costs towards the 20-period shifting common (orange) which stood at $92.31 on the time of writing.

Rationale

Could Solana see a bounce as it approaches a demand zone

Supply: SOL/USDT on TradingView

The RSI has been unable to push above the 60 mark throughout Solana’s rally earlier in February. Subsequently, the RSI dropped under impartial 50 and almost reached the oversold territory. Within the subsequent few days, it was doable that the RSI would register a better low at the same time as the worth fashioned a decrease low.

The MACD, just like the RSI, struggled to remain above the zero line on the 12-hour charts. It fashioned a bearish crossover and was shifting under the zero line on the time of writing. The OBV was additionally dropping swiftly- and promoting quantity has already been increased than the shopping for quantity earlier this month.

Conclusion

Contrarian merchants on decrease timeframes may trigger a bounce in SOL’s costs, and the 20 SMA at $92.3 might be a pretty location to enter brief positions at. Nevertheless, the market construction and the concern in market members meant that none however the savviest merchants have any enterprise “shopping for the dip” till situations change.

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