For the third time since August, Solana [SOL] has faced a challenge in surpassing the $163 resistance level. Over the last couple of days, the cryptocurrency has witnessed some short-term price fluctuations, resulting in a 3.4% decrease from its recent peak at $161.8.
Recent data indicating an increase in whale ownership as well as a surge in social media activity point towards a positive outlook for Solana moving forward. Conversely, a decline in market demand could signal the possibility of a significant price correction.
Solana’s Price Movement Indicates a Bullish Trend
A battle for dominance around the $154 mid-range level, aligning with the 50% retracement level, has been ongoing. Looking back at September, a bullish trend emerged after breaching the $140 resistance level on the lower timeframes.
The Accumulation/Distribution (A/D) indicator has been steadily climbing since July, indicating a stronger presence of buyers over the past three months. Additionally, the daily Relative Strength Index (RSI) also shows a positive momentum.
For swing traders eyeing long positions, the breakthrough of the $162-$165 resistance zone is crucial. Post this breakthrough, the bulls may target the range high of $187 as the next objective.
Although there are positive signals from the accumulation/distribution data, the trading volume remains at an average level over the last six weeks. The subdued volume as Solana approached a crucial resistance level raises concerns among investors.
Coinalyze Observations Highlight Volatility
Coinalyze’s analysis reveals a decline in the spot Cumulative Volume Delta (CVD) in the last two days, coinciding with the retreat from $161.8. The heightened selling pressure near a resistance level has dampened the prospects of an immediate breakthrough.
Despite the recent dip, the funding rate remains in the positive territory, with a continued uptrend in Open Interest. Although the OI was impacted by the downturn, it has shown signs of recovery in recent hours.
Given the volume dynamics, it seems probable that Solana might experience a retracement below $154 in the near future.
Disclaimer: The insights provided are a personal perspective and do not serve as financial, investment, or trading advice.