wither It’s actually not very interesting for the price to test the $25 level again, and there are three important developments that can support this bearish move.
Solana price has started to display an interesting outlook, which can be interpreted as the exhaustion of bullish momentum and the potential start of a downtrend. Traders can wait for confirmation or jump early into a reversal trend.
Liquidity Pools and Barriers in Solana
Solana price managed to climb 45% between July 13 and July 19 after setting the $31.66 support level for the third time. This increase resulted in a climb above the $44.37 interim resistance barrier and surged to $44.90 on June 6 to rally the buy-stop liquidity above it.
The first reason for the drop is basically the obvious liquidity run. The second reason is the continuation of the $44.37 resistance level, which is making a SOL reversal even more difficult.
However, traders should observe that there is more buy-stop and sell-stop liquidity on both sides. Even if the bulls are fighting with all their might, a retest of $47.43 is possible, but a return to the same level is unlikely.
Because, Solana price The next move for the direction is reversal.
The Relative Strength Index (RSI) also further supports this outlook. This momentum indicator is used to assess market sentiment and shows that Solana price is above the overbought level of 70.
The last three times Solana has rebounded, the RSI stuck around the 70 level and found support at the 30 level. There is not much data to prevent this trend from continuing. Therefore, assuming a rejection occurs at the current level, traders can expect the Solana price to drop from the current level and bring the RSI with it.
Bitcoin price and its impact on SOL
Bitcoin price is currently facing the 200-week Simple Moving Average (SMA) at $22,559. Assuming BTC is rejected at this level, Solana price will repeat the same move. In such a situation, investors can expect the altcoin to lose market value and make a profit for panicked investors.
This could result in Solana price retesting the $38.22 support level; beyond that, SOL could fall and rally the sell-stop liquidity to revisit the $31.66 support.
In some cases, Solana price may retest the $24.52 weekly support base to rally liquidity below the lows formed between June 13 and June 18. This move could mean a 44% drop overall.
On the other hand, from a technical standpoint, it should be noted that if the Bitcoin price exceeds the 200-week SMA, the bears will lose strength. In such a scenario, the aforementioned resistance can easily be overcome.
You can follow the current price action here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.