Solana [SOL]: Bears break under $20 as sellers look to extend gains

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

SOL bears look to flip the $20 support level to resistance
$1.86 million worth of long positions liquidated over the past five days

Solana [SOL] remained on a perpetual bearish slide, despite a recent report highlighting increased network usage for the altcoin. The inflow of new users hasn’t had any significant impact on SOL’s price. The bearish momentum saw the price close below the key $20 support level over the past 24 hours.

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

With Bitcoin [BTC] retesting the 26k price zone, bears might be tempted to push for more dips. However, the bulls could immediately look to reclaim the $20 support level.

Can bears flip the $20 support level to resistance?

Source: SOL/USDT on Trading View

Prolonged selling pressure has seen Solana lose over 24% of its value in the past month. Price broke through the $22.8 support level on 6 May but bulls put up stiff resistance at the next support level of $20.

Despite the bullish pushback at $20, recent price action and on-chart indicators suggested that bears might be winning the battle to swing prices lower.

Additionally, the Relative Strength Index (RSI) stayed under the neutral 50, since 7 May and stood at 36, as of the time of writing. This showed increased selling pressure on SOL. The On-Balance Volume (OBV) also declined by 8.49 million over the past seven days to indicate waning demand for SOL.

The 12-hour chart showed a bullish candle that broke through the $20 support level immediately after the bearish candle close. A full bearish 12-hour candle close under this level for Solana might signal the bears prevailing and sellers could aim for the $18.8 support level.

While the on-chart indicators favored the bears, the previous bullish rally at the $20 support level could offer buyers a fighting chance to reclaim the level and push for further gains. BTC recording bullish gains in the coming days could spur SOL buyers.

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

$1.86M worth of SOL longs liquidated in futures market

Source: Coinglass

Data from Coinglass over the past five days revealed that liquidation of long positions accounted for 84.7% of the total liquidations on Solana. This amounted to $1.86 million worth of longs liquidated compared to just $335.76k of shorts.

Shorts also continued to slightly edge current positions with a 50.2% advantage on the four-hour timeframe. This showed that speculators in the futures market leaned toward a bearish sentiment on SOL.