Solana Rebounds 8.5%, Bearish Trend Persists
The Essentials at a Glance
- Solana (SOL) experienced an 8.5% price increase after a pullback to 143 USD.
- The 152 USD level has been re-established as support.
- Trading volume remains low – a warning sign for sustainable upward movements.
- Technical indicators show short-term strength, but the medium-term trend remains bearish.
Solana Tests Key Support Zone
Last week, Solana dropped from 155 USD to 143 USD. The reason was a strong inflow of 2.8 million SOL to the crypto exchange Binance. Such movements often indicate selling intentions by large market participants. The price decline led to a renewed test of the support zone at 143 USD – a level that already served as a turning point in April.
Short-Term Upswing – But No Trend Reversal Yet
After testing the 143 USD mark, Solana recovered by 8.5% within three days. The price broke through the 152 USD level and turned it into support. Nevertheless, the medium-term trend has been downward since mid-May. The market structure continues to show lower highs and lower lows – a classic sign of a bear market.
Technical Indicators in Detail
A look at the daily chart shows: The Money Flow Index (MFI), an indicator for buying and selling pressure, still signals seller dominance. Trading volume also remains below the 20-day average, indicating weak market participation. The On-Balance Volume (OBV) indicator, which measures volume in the direction of the trend, has been moving downward for a month – another sign of lacking buying power.
4-Hour Chart: Hope for Short-Term Traders
The short-term 4-hour chart paints a different picture: The OBV is approaching a descending trendline, a breakout of which could indicate a potential trend reversal. The MFI has also been rising for three days – a sign of increasing buying pressure. Nevertheless, the structure remains bearish here as well. Only a breakout above the last intermediate high at 162 USD would signal a true trend reversal.
What Does This Mean for You as a Trader?
If you are trading short-term, you can benefit from the current upward movement – provided you closely monitor the technical levels. A breakout above 162 USD could present an opportunity for long positions. Long-term investors, however, should remain cautious, as the low volume and weak market structure indicate uncertainty.
Our Assessment
Solana shows early signs of recovery, but the foundation for a sustainable rally is currently lacking. Low trading activity and the continued bearish trend argue against a quick return to previous highs. Short-term traders may find opportunities but should tightly manage risk. For long-term investments, patience is key – only a clear structural breakout to the upside would deliver a positive signal. We continue to monitor developments.
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Sources
- TradingView
- Binance Research
- Glassnode
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