Disclaimer: The information presented is not financial, investment, trading or other type of advice and is the opinion of the author only
- SOL was in a nearly neutral structure at press time on the 4-hour chart
- It has recorded high NFT trading volume and growth activity in the past few days
solana [SOL] It has aggressively defended the $20-support for the past few days. However, the price action has not moved beyond $21.50 since late March, setting up in a consolidation range below a multi-week descending line.
read solana [SOL] Price Prediction 2023-24
At press time, bitcoin [BTC] Also fluctuates between $26.8K and $28.8K. Since SOL has taken cues from BTC’s sideways structure, an extended BTC consolidation could also tip SOL to maintain range trading.
Retracement or Extended Consolidation for SOL?
At the time of writing, the near-term bears seem determined to clear the 50 MA (moving average) at $20.81, which could increase selling pressure in the near-term. On the other hand, the price action was trading below the 200 EMA (yellow line), which has been moving in a straight line for the past few days. This revealed a possible extended consolidation phase in the medium/long term.
The declining ADX (Average Directional Index) further strengthened the consolidation thesis, suggesting a possible consolidation or retracement. However, the RSI (Relative Strength Index) was slightly below the 50-mark – a neutral position that underlines that the price could move in either direction.
Therefore, there could be a downside break below the $20.65 mid-level of the SOL channel, especially if BTC breaks below $28K and moves back to the $27K-region. The lower boundary of the $20 channel could test the downside and provide potential fresh buying opportunities if the support is retested.
However, a BTC rally above $28K could set SOL to target the upper boundary of the channel at $21.31. However, the bulls must deal with some hurdles at the 50 MA, 200 EMA and the descending line to hit the targets.
SOL sees more NFT trading volume
Despite fierce competition on the NFT front recently, Solana Network saw an increase in NFT trading volume in the first week of April. Total NFT trade volume increased from $7.8M on March 31st to $12.7M on April 5th. Similarly, there was an increase in development activity during the same period, which may bode well for investors. This was complemented by an increase in weighted sentiment as well.
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While improved investor sentiment could fuel the efforts of bulls, BTC’s sideways structure could undermine any strong uptrend. Therefore, investors should track bitcoin while targeting the range of the channel to profit in the near term.