The $20 Barrier: A Complex Challenge
Solana’s journey beyond the $20 mark faces multiple resistance levels.
Confluence at $20
The $20 price point is a confluence of various resistance levels that pose a formidable obstacle.
Futures Market Dip
The Futures market witnessed a decline in demand, granting sellers greater influence.
Impressive Recovery but Ongoing Downtrend
Despite Solana’s impressive rebound, the overall price action remains in a downtrend. The recent ascent from $17.3 to $20.54 secured an 18% gain for bulls. However, surpassing the $20 threshold could prove challenging due to these circumstances.
Should Bulls Worry About the $20 Hurdle?
Examining the daily chart reveals a descending channel in price action since July. The recent recovery, initiated on September 11, rebounded from the channel’s lower range ($17) but encountered resistance near the mid-range.
The current retracement may find support at the H12 bullish order block (OB) in the $18.3 to $19.5 range (highlighted in white). The OB aligns with the mid-range and could facilitate a reversal, provided Bitcoin (BTC) doesn’t experience substantial losses in the short term.
Key interest levels for buyers include $16, $17.75, and the mid-range at $18.
The Formidable $20 Resistance
However, the $20 level presents a significant confluence of resistance levels. As of now, SOL has struggled to surpass $20.60, establishing a bearish market structure on the daily timeframe. A bearish OB resides above the range-high, further complicating a breach of the $20 barrier unless BTC experiences a substantial rally.
Spot Market Influence
The recent recovery was influenced by the Spot market, as indicated by the On-Balance Volume (OBV). Nevertheless, the Chaikin Money Flow (CMF) and Relative Strength Index (RSI) exhibited signs of faltering near critical threshold levels, suggesting a decrease in capital inflows and buying pressure.
Sellers Strengthen Their Grip
The Cumulative Volume Delta (CVD) depicts a prolonged decline, signifying sellers’ increasing control over the market. Additionally, the Open Interest rate has declined, indicating a dip in demand.
Furthermore, the negative reading on the Accumulative Swing Index (ASI) underscores Solana’s persistent downtrend. The ASI tracks the strength of price swings and emphasizes sellers’ leverage, particularly on higher timeframe charts.
