Solana Market Update: Analyzing the Current Situation and Outlook
The market structure of Solana (SOL) has weakened recently as Bitcoin (BTC) struggles to stay firmly within the $27k price zone. Bears have breached the $20 psychological level, exposing SOL to additional selling pressure.
Despite the ongoing bearish pressure, the “Crypto Fear and Greed” index is currently at a “neutral” level, indicating that SOL’s price could either recover or sustain further losses. This raises the question: which way will SOL go?
Key Resistance Level and Declining Buying Pressure
The price action since late April has faced rejection at a significant trendline resistance level (blue line). At present, another price rejection has been witnessed at this obstacle, making it a crucial barrier for bullish momentum.
Meanwhile, the Relative Strength Index (RSI) has predominantly stayed within lower ranges throughout May, indicating declining buying pressure in recent weeks. Similarly, the On Balance Volume (OBV) has also declined during this period, limiting the potential for a strong revival.
Possible Scenarios for SOL
If Bitcoin continues to weaken, SOL could remain below the trendline resistance. In such a scenario, bears might push SOL towards the daily chart bullish order block and support zone (cyan) in the range of $16.7 to $17.8.
On the other hand, if SOL bulls manage to break above the trendline resistance, it would require BTC reclaiming the $27k level and experiencing a surge. However, the outcome depends on market conditions, particularly the ongoing U.S. debt ceiling situation. If the conditions are favorable, the next target for bulls would be $21.
Positive Growth in Open Interest and Buyer-Seller Dynamics
According to Coinglass, SOL has witnessed positive growth in the open interest rate since mid-May, following a period of stagnation between May 9 and 13. The open interest rose from approximately $230 million on May 15 to over $300 million on May 23, indicating a bullish sentiment.
During the same period, there was also a rise in the Cumulative Volume Delta, suggesting that buyers were gaining the upper hand. However, from May 23, this metric slightly declined, indicating a resurgence in selling pressure.