SOL falls below critical support - can sellers extend gains?

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

Intense selling pressure could lead to a retest of the $12.81 support level.
Shorts held sway with a 51.16% advantage on long/short ratio.

Solana’s [SOL] slump saw it reach a new low of $12.81 on 10 June. This marked the first time SOL’s price returned to its January low after the bullish drive that saw it hit a year-to-date high in February.

With significant economic events such as the Consumer Price Index (CPI) and Federal Open Market Committee (FOMC) taking center stage, the ripple effects have trickled down into the crypto market.

Realistic or not, here’s SOL’s market cap in BTC terms

With Bitcoin [BTC] remaining under the $26k price, SOL buyers could face an uphill task to rebound from current lows.

SOL sinks to year-low

Source: SOL/USDT on Trading View

SOL’s bearish slide has seen it break two support levels over the past ten days. The sharp downward move on 5 June took SOL below the $20 psychological level. Additionally, a retest of the $20 level ushered more selling pressure with successive bearish candles on the 12-hour timeframe. This saw SOL break the $16.66 support level.

Furthermore, the price found support at the $12.81 support level, although the rebound was short-lived. With the active presence of sellers, a retest of the $12.81 support level looks imminent.

The Relative Strength Index (RSI) remained firmly in the oversold zone with a reading of 28, as of press time. Additionally, the On-Balance Volume (OBV) also maintained a bearish trendline restricting the prospects of a bullish reversal. The declining volume could be a result of the delisting of SOL on some major exchanges, due to the SEC’s lawsuit.

For SOL bulls to get any form of advantage, the $16.66 resistance hurdle will need to be cleared along with a sustained bullish push by BTC. However, on the flip side, a retest of the $12.81 support level could see more downside for SOL with $11.23 as the next target for bears.

Shorts primed for more opportunities

Source: coinglass

The 12-hour timeframe long/short ratio revealed the leanings of market speculators. Data from coinglass showed that shorts held a decent 51.16% advantage over longs. This signaled that sellers were actively looking for more dip opportunities.

Read Solana’s [SOL] Price Prediction 2023-24

The liquidation heatmap over the same period showed $454.75k worth of long positions were liquidated. Furthermore, this represented 90% of the total liquidations on SOL. Together, the metrics highlighted the mid/long-term bearish dominance by SOL sellers.