By Curtis Dye
Despite early bear efforts to grab the market, bullish supremacy has prevailed in the Solana (SOL) market over the previous 24 hours. During the upswing, the bulls could value the SOL price between the support and resistance levels of $20.26 and $21.01, respectively. As of press time, the price has risen by 3.35% to $21.01.
Due to the increased expectation of a lengthy bullish run, traders jumped in, leading the market capitalization to rise by 3.35% to $7,885,540,133. However, the 24-hour trading volume has decreased by 51.63%. Despite a drop in 24-hour trading activity, the bulls managed to pull off a 3.35% gain in price and market capitalization, demonstrating the power of their attitude. While this rally was only transitory, investors have found newfound faith in the bull run’s possibilities.
SOL/USD 24-hour price chart (source: CoinMarketCap)
The 2-hour price chart shows that the SOL market is relatively stable, with price fluctuations staying within a tight band of 21.05 to 20.02, as shown by the linear movement of the Bollinger Bands. Buyers are gathering power as the price action in the 2-hour chart heads higher, confirming the upward trend. This trend is a positive sign for the market, suggesting that traders should consider going long on the SOL market to take advantage of the current favorable conditions. Still, the market’s rapid reversals with significant swings in price movement call for traders to exercise caution and not over-leverage their holdings.
If the MACD line is above the signal line, as it has done in the SOL market (with a reading of -0.11), buyers have the upper hand, and traders could consider taking on more risk in anticipation of more price appreciation. Conversely, if the MACD readings drop, volume drops, or prices start to retrace toward the lower band; traders should keep an eye out for negative signals. In addition, the histogram value of 0.14 is positive, suggesting that the SOL market’s momentum is improving.
Also read:With a rating of 0.12 on the Chaikin Money Flow (CMF), it is clear that buyers are outnumbering sellers in the SOL market, signaling an optimistic market outlook. Since buyers are more assertive than sellers now, this bodes well for price increases shortly. When the CMF index is high, buyers are confident that the current price trend will continue. More money is moving into the market than is leaving it, a positive indication of underlying momentum and an indicator of a possible bullish trend.
SOL/USD 2-hour price chart (source: TradingView)
However, the Bollinger bands on the 24-hour price chart are swollen, with the upper band touching $26.57 and the lower band at $20.23. An increasing price range indicates a volatile market, as shown by a more significant gap between the upper and lower bands. Therefore, it may be prudent to wait for the present trend of a bullish breakout to continue as price action forms a green candlestick close to the lower band.
With a value of 0.18, the MACD LINE has also dropped below its signal line, suggesting that the recent upswing in SOL has decreased. As a result, prospective market participants should exercise care, as the current rally might soon reverse. In addition, the histogram trend has recently dropped, consistent with the bearish view that buyers are giving way to sellers.
In addition, the CMF’s recent dip into the negative territory, where it now sits at -0.11, lends credence to the idea that the bullish momentum may be fleeting. This move is evidence that the market has witnessed an infusion of negative sentiment, suggesting the upward trend may not endure. Although the SOL market is buoyant in the short term, this negative trend of the CMF indicates that this may soon reverse and become bearish.
SOL/USD 24-hour price chart (source: TradingView)
Technical indicators reveal that even though the SOL market is bullish, bear strength is growing, cautioning traders of a probable reversal.
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