Solana [SOL] swung above the 20/50/200 EMA thanks to an impressive streak of green candles following a rebound from its multi-weekly trendline support (white, dashed).
Following a bearish hammer-like setup, the cryptocurrency saw an expected reversal from the $37-ceiling. In the meantime, buyers could try to enter near the 200 EMA to avoid further losses.
SOL was trading at $31.48 at press time, down 11.88% in the previous 24 hours.
SOL approached its high liquidity region
SOL’s recent u-turn from the $37-ceiling induced a substantial pullback as the bears reentered the market. The strong rejection of higher prices from this barrier led to a streak of red candles in the last two days.
As a result, SOL declined below the 20 EMA (red) and 50 EMA (green) to depict an easing buying edge. Furthermore, SOL’s downturn toward the immediate trendline support could reignite some buying pressure in the coming sessions.
A potential rebound from the $32-mark baseline or the trendline support can offer near-term buying opportunities. In this case, the sellers could aim to constrict the buying resurgence in the $34-$36 range.
Any close below the trendline support can invalidate the bullish comeback efforts. This decline could potentially lead SOL into a slow-moving phase in the $30 region.
At the time of writing, the Relative Strength Index (RSI) eyed to retest its oversold mark. The altcoin’s historical inclinations to rebound from this level could keep the bullish revival hopes alive in the coming sessions.
To top this off, the On-Balance volume’s (OBV) lower peaks over the last few days hinted at a potential bullish divergence with the price action.
Downward trend on the funding rates
An analysis of SOL’s funding rates revealed a slight downtrend over the last 24 hours. Alongside the price decline, the broader sentiment in the futures market deteriorated as its funding rates on dYdX and FTX turned negative.
The buyers should look for a potential reversal toward the positive side before placing a long position.
But the triggers and targets would remain the same as discussed above. Importantly, investors/traders must keep a close eye on Bitcoin’s [BTC] movement to determine its effects on the broader sentiment.