Tracing SOL’s rebound potential after a significant breakdown

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

• Solana fell below its high liquidity range to exhibit a strong selling edge while its RSI eyed the oversold region.
• The altcoin’s funding rates were on a downtrend.

Solana’s [SOL] break below the vital $30 range induced a streak of red candlesticks over the last three days. This trajectory highlighted a surge in the already existent bearish advantage.

Here’s AMBCrypto’s price prediction for Solana [SOL] for 2023-24

The decline below the $28 baseline exposed SOL to a further downside risk while keeping a rebounding opportunity intact. In the meantime, the 20 EMA (red) and the 50 EMA (cyan) continued to look south to affirm a selling edge.

At press time, SOL traded at $27.0675, down by 7.53% in just the last 24 hours.

SOL flipped its trendline from support to resistance

Source: TradingView, SOL/USD

SOL’s latest u-turn from the $34-ceiling propelled a major pulldown that aided the sellers in breaching the long-term support near the $30-zone (now resistance). The rising wedge breakdown added fuel to SOL’s bearish fire.

As a result, SOL swayed below the 20 EMA (red) and 50 EMA (green) to unveil a strong bearish edge. Furthermore, SOL’s decline below the trendline resistance after a bearish engulfing candlestick confirmed a robust bearish pull. 

A potential break below the $26.3-support could expedite the bearish pressure in the coming sessions. The sellers would look to pull the prices toward the first major support at the $24 zone before a likely bullish rebuttal.

This rebuttal could also present shorting opportunities with a target in the $27-$29 range. Nonetheless, a rebound from the $26-level could induce a slow-moving phase.

The Relative Strength Index (RSI) eyed to retest its oversold mark, at the time of writing. The altcoin’s empirical inclinations to rebound from this level could keep the bullish revival hopes alive in the coming sessions.

Funding rates started to slip

Source: Coinglass

An analysis of the funding rates revealed that SOL marked a reversal from the peaks of its positive funding rates across all the exchanges.

On an 8H interval, the rates on several exchanges, including Binance and FTX, dropped in the negative zone. The buyers should keep a close watch on the improvements on this front to gauge the underlying sentiment. 

Finally, investors/traders must keep a close eye on Bitcoin’s [BTC] movement to determine its effects on the broader sentiment.