Solana (SOL) has been trading in a range formation since June 10, experiencing a recent double increase. The first impetus came from Bitcoin’s upside, while the second was driven by Solana’s impressive performance in the NFT space. However, price action has peaked at $16.11, prompting a potential retracement scenario.
Solana Consolidation and Possible Retracement :
Solana’s current price action has hit a high of $16.11. Meanwhile, Bitcoin is focused on the $27k mark, but if the bulls falter, SOL could retrace to the previous support level. At time of writing, the Relative Strength Index (RSI) is above the 50 mark but has registered a slight decline, indicating a recent drop in buying pressure. Similarly, the Accumulation/Distribution indicator is slightly backwards, indicating a pause in accumulation.
Main Support and Resistance Levels :
If Bitcoin fails to surpass $27k, Solana could retrace to the mid-$15.24 range or even back to the $14.4 low. In particular, the previous mid-range acted as a savior of the bullish momentum. Beneath that lies significant resistance from November/December 2022, at $14.93. A possible rebound between $14.93 and $15.24 could present an interesting buying opportunity for traders.
Opportunity for Rebound and Secondary Purchase :
On the other hand, if BTC crosses $27k, a retest of the breakout level around the $16.11 high could occur. Combined with Solana’s positive momentum, this scenario could offer a secondary buying opportunity, targeting $17.33, near the March swing low. Traders should closely monitor Bitcoin 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 buy and sell volumes and overall sentiment, has shown an improvement on the 1 hour chart since June 18. However, the metrics have moved sideways, suggesting a temporary easing of buying pressure. Open interest rates have also remained relatively stable below $160 million, indicating a need for caution amid potential bearish sentiment.
Solana’s range formation continues to shape price action, presenting possible retracements and potential buying opportunities. Traders should monitor Bitcoin movements and key support/resistance levels for informed decision making.