Solana’s Short-Term Potential: Can SOL Bulls Trigger a Rally?

• Solana continued its downtrend until reaching its four-month support range.
• The altcoin’s open interest showed signs of a likely reversal.

After a promising performance in the first quarter of this year, solana [SOL] experienced a fairly slow trajectory in recent months.

SOL lost almost 30% of its value over the past month after retreating from the $186 resistance level. Technical indicators were pointing to highly oversold conditions at press time and showing signs of a trend reversal.

The coin’s open interest trends have increased over the past month, while also signaling a bullish divergence with price action. At the time of writing, SOL was trading at $134.3, down almost 7% from last week.

Can Solana Bulls Trigger an Uptrend?

SOL’s reversal from the $186 resistance reaffirmed bearish pressure last month as the coin continued its downtrend and tested the $133 support level at the time of writing.

Here, it is worth noting that SOL held the $126-$133 support range for almost four months. Therefore, a possible reversal of this range again seems plausible.

Meanwhile, the coin’s recent downtrend marked a classic falling wedge pattern on the daily chart.

While the bulls attempted to break the streak of red candles, they should now hold the support range of $126 to $133 to avoid a major price breakout to the downside.

If the bulls can defend this support range, SOL could muster firepower to retest the $174 resistance in the coming days.

SOL experienced a breakout after a similar falling wedge breakout that occurred last month and recorded a 30% gain to test the $186 resistance. Any close above the $141 resistance may confirm the chances of a big rally .

The Stochastic RSI showed a highly oversold position and confirmed a bearish advantage at the time of writing. However, it also confirmed the chances of a likely reversal as it saw a bullish crossover at the time of publication.

The Crypto Fear And Greed Index was still in the “greed” zone, indicating that an uptrend could still be in play.

However, buyers should keep an eye on trading volumes as the coin aims to break out of its current pattern. The altcoin’s inability to support the green candles with sufficient volumes may lead to a short-lived breakout.

Open interest remains stable despite price decline

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Open interest (OI) levels on binance [BNB] remained stable during a sharp price decline. This indicated that despite the price drop, there is still strong interest in holding positions as traders possibly anticipate a reversal.

Please note that OI levels remaining stable in isolation are not a bullish signal. But it can confirm the potential for a reversal when complemented by technical indicators and overall sentiment analysis.

This is an automatic translation of our English version.