Solana’s 14% Drop: Short-Term Slump or Bullish Reversal Ahead?
Solana: Price Drop and Forecast
Solana (SOL) has recently experienced a 14% price drop, similar to the rest of the market. But is there perhaps a silver lining on the horizon?
Contradictory Trends and Possible Bullish Reversal
The trends of Solana prices on higher and lower time levels seem to contradict each other. This suggests that a bullish reversal could occur soon. A lack of selling volume recently means that the decline may not be too deep.
Increasing Social Engagement and DEX Volume
Solana’s network has recently seen a significant increase in social engagement. This is largely due to the Jito (JTO) airdrop. As a result, the DEX volume in the Solana network has also increased significantly. Solana’s NFT sales have also increased over the past week. Despite these developments, however, the token has recently experienced a price drop.
Price Development and Possible Support Zones
Solana traded in a range for most of November, rising from $51.1 to $64. On December 7, SOL broke through the upper limit of this range and reached $77.78. Since then, however, the price has dropped. The RSI fell below 50, indicating a shift in momentum in favor of the bears. The Fibonacci retracement levels suggest that a bullish reversal could occur at $63.11 and $66.24.
Decline in Open Interest and Market Sentiment
The last two trading days saw a slow price decline of Solana from $77.78 to $70, accompanied by a decline in open interest (OI). This suggests that market participants are losing their bullish sentiment. Surprisingly, however, the Spot CVD has increased. This is a sign of healthy demand for the token on the spot markets, even though the short-term sentiment is bearish. Therefore, the recent decline could be temporary and minor.
Outlook
On the higher timeframe charts, the $60-$65 zone represents a support zone where the bulls could initiate a recovery. Despite the recent price drop, positive developments for Solana may still lie ahead.
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Source: AMBCrypto
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