The price of Solana (SOL) has experienced consolidation in recent trading sessions, particularly in light of Bitcoin’s inability to trade at $31,000. SOL remains below a significant resistance level that the bulls have struggled to overcome for several weeks.
On the daily chart, SOL has depreciated by 1.4%. On the weekly chart, the price has slightly declined by just over 2%. The technical outlook appears grim, with limited buying strength indicated by falling demand and accumulation on the daily chart.
Solana may require the support of a Bitcoin rally above the $31,000 mark to break past the overhead resistance. This has to be coupled with strength in the broader market. The participation of buyers will be crucial for SOL’s upward momentum.
However, if SOL fails to surpass the immediate ceiling in the upcoming trading sessions, the extended consolidation phase could lead to a price decline. Additionally, the recent decline in market capitalization within the last 24 hours is considered a bearish sign for the altcoin.
Solana Price Analysis: One-Day Chart
After facing rejection at $17.30, SOL currently trades at $16.30. The coin is encountering overhead resistance at $17. A breakthrough above this level could pave the way for a rally toward $18.
Although SOL is currently stuck below the resistance, there may be potential buying opportunities for traders shortly. If consolidation persists, SOL can lose its current price level and decline to $16.
Subsequently, it may drop to $15.60, which has served as a Point Of Control (POC) indicated by the red line. The POC represents a significant trading volume, suggesting that it could present a favorable buying opportunity as the coin has historically tended to recover from that point.
Since failing to surpass the $17 mark, SOL has experienced persistently low buying strength. The Relative Strength Index (RSI) has made attempts at recovery, but crossing the 50-mark has proven challenging.
As a result, sellers have maintained control of the market. Furthermore, SOL has fallen below the 20-Simple Moving Average, indicating increased downward price action as sellers drove the price momentum.
Based on its daily chart, there are promising signs of potential gains for the altcoin. The Moving Average Convergence indicator shows buy signals, as indicated by the formation of green histograms. This suggests a shift in momentum.
Additionally, the Bollinger Bands, which measure price volatility, have converged, indicating that the price is currently constricted. However, this might also imply the possibility of a breakout. If a breakout occurs, SOL could experience a rally of over 10%.
Featured image from UnSplash, charts from TradingView.com