Bitcoin and Crypto Market Consolidation
Bitcoin [BTC] and the majority of the crypto market danced to the tune of the sellers in recent days. In May, the prices of most crypto assets consolidated within a range. However, Solana appeared to break above a crucial resistance over the weekend.
USDT Dominance Rises, Investors Flee to Stablecoins
This was not to be. USDT (Tether) Dominance rose by 6% since Monday, showing investors fleeing to stablecoins. The swift bounce of the 12 hours preceding the time of writing could soon be undone amidst another wave of selling.
Solana Bulls Trapped Above $22
Over the last weekend, Solana prices climbed past the short-term resistance at $21.4 and were able to reach as high as $22.3 on 5 June. Things changed quickly, and news events exposed the weakness of the bulls.
Since 19 April, Solana has been on a downtrend on the 4-hour chart. Like the move above $22, it has signaled bullishness in the past six weeks, but the bulls were not able to follow through on any of them to shift the trend.
The higher timeframe structure showed that $27.1 was the key resistance to beat before the bias would shift bullish. At the time of writing, the $20.26 swing low was not defended. Hence, the market remained firmly bearish. To the south, the $18.66 level was highly likely to provide a bounce in SOL prices as it has been significant since March.
The RSI showed bearish momentum, but the CMF noted a reading of +0.13. This was a sign of strong buying pressure and a large capital influx to the market. Yet, buyers lack strength. Bears can remain cautious, due to the imbalance created between $20.6 and $21.5 on Monday.
Speculators Straddle the Fence as Bears Prepare for Another Leg Downward
Coinalyze data showed that the spot CVD has been in a firm downtrend over the past two days when Solana faced rejection above the $22 mark. This was a sign that selling volume far outweighed the buying one.
The Open Interest was almost completely flat even when Solana prices bounced from $19.4 to $20.7. This was a 6.7% move, but the OI hardly budged, showing that the sentiment remained bearish. Hence, SOL is likely to drop toward the $18.66 level in the coming days.
Conclusion
In conclusion, Solana bulls faced a tough challenge as the market sentiment remained bearish. With resistance levels proving difficult to break, the possibility of a further downward move is looming. Traders should exercise caution and closely monitor key support levels.
