Solana [SOL] recently tested the $180 resistance level but struggled to establish it as a strong support area. Despite a bullish momentum and sentiment, the path to further gains appeared challenging.
Since June, Solana has been trading within a range bordered by $122 and $187. Notably, on October 19th, the price broke above the mid-range level at $154, indicating a potential upward movement towards the range’s upper boundaries.
Will Solana Confront Rejection or Breakout?
Upon analyzing the daily timeframe, a bullish market structure emerged after surpassing the $161 swing high from September. The A/D indicator displayed a consistent upward trend throughout late October, suggesting an increase in buying pressure.
Furthermore, the MACD indicator signaled bullish momentum on the daily chart without indicating potential overextension or an imminent pullback. Recent whale activity, with a $35 million accumulation of SOL, has further fueled bullish sentiments among investors.
Nevertheless, the probability of encountering resistance between $190 and $200 remains high due to the current range formation and concentration of liquidity at these levels.
Trading within the existing range instead of anticipating a breakout during each retest of extremes is generally advisable. An illustrative case is the price spike to $194 on July 29th, followed by a subsequent 43.3% decline in the following week, underlining the importance of time in reclaiming range highs as dependable support levels.
Upward Pull Towards Attractive Price Points
Analysis of the liquidation heatmap over a one-month period revealed significant liquidation levels in the $184-$196 range. This suggests a gravitational pull on Solana prices towards this region before a potential bearish reversal.
While no reversal is guaranteed, particularly amid Bitcoin [BTC] nearing its peak and a prevailing bullish market sentiment, traders should brace themselves for diverse scenarios.
A breakthrough above $195 accompanied by a retest of $190 in the near future may present a favorable entry point for traders.
Disclaimer: The opinions expressed in this article are personal and do not constitute financial, investment, or trading advice.