Solana bulls show signs of reversing recent losses, will another rally begin

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

• The lower timeframe price action of Solana was bearish, but it appeared to be changing.
• The long-term outlook for Solana was bullish after its rally past $30 and subsequent retracement.

Solana [SOL] had a strong bullish performance in June. The price rallied from $14.06 to $32.13 within 30 days, beginning on 14 June. The move measured 128.5%, and the higher timeframe price action of SOL continued to favor the bulls.

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

Over the past five days, SOL has struggled to breach the local resistance at $23.57. Bitcoin [BTC] fell to $28.7k on 7 August but was climbing higher at the time of writing, but it was likely to face stiff resistance near the $30k area.

SOL was on the brink of a bullish structure break on the 4-hour chart

Source: SOL/USDT on TradingView

The $23.57 level was marked by a green line and represented a lower high for SOL. The price has been in a downtrend over the past week after the drop below the $24.75 level. Yet, the bulls have managed to defend the $22.5 zone. The RSI, which had been below neutral 50 throughout August, has climbed past it to indicate momentum favored the buyers.

This was reflected by the OBV being pushed higher over the past week as Solana hovered just above the $22.5 level, showing increased buying pressure. The CMF also agreed with this idea, with its reading of +0.17 signaling notable capital flow into the market. The $20-$22 region was significant on the 1-day chart as it represented a bullish breaker block from mid-June.

The previous retest of the $23.57 level saw a near-term swing failure pattern develop, followed by a reversal that reached $22.5. SOL could have formed a short-term range between these two levels and was a scenario short-term traders can be prepared for.

The rising spot CVD showed demand was trickling into the market

Source: Coinalyze

The Open Interest chart has climbed lower over the past two days even though SOL prices bounced higher. This showed speculator sentiment leaned bearish.

On the other hand, the spot CVD has begun to trend higher since 4 August. Therefore, backed by genuine demand, a breakout past $23.6 and another move higher was likely.

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

If Bitcoin can maintain its bullish momentum and SOL can close an H4 session above $23.57, it would indicate further gains were likely for SOL. Yet, bulls should exercise caution.

The sentiment behind BTC was not firmly bullish. A rejection from the $30k area could hurt the chances of a Solana rally.