The bearish market conditions for Solana (SOL) persisted as the altcoin struggled to break the pattern of lower highs. The recent breach of the $20 support level by bears further weakened SOL’s position in the market.
Bitcoin’s price fluctuation between $26,000 and $27,000 has made investors cautious, as they seek to avoid potential losses from significant price swings.
Despite strong defense by bulls over a two-week period, the $20 support level eventually succumbed to bearish momentum. Attempts to rally were met with resistance at the new level, leading to further declines. As of press time, SOL was trading at $19.26.
The indicators displayed on the charts did not offer definitive signals, as the Relative Strength Index (RSI) remained below the neutral 50 level, signifying a lack of buying pressure. The On Balance Volume (OBV) showed no significant changes, while the Chaikin Money Flow (CMF) fluctuated around the zero line. These observations indicate that market speculators were uncertain about the inflow of capital into SOL.
A brief bounce off the minor support zone at $18.86 was observed on the four-hour timeframe, but considering SOL’s historical price movement, this might only be a temporary respite before bearish momentum resumes.
A potential bullish rally for Solana could be triggered if Bitcoin surges back towards the $30,000 level. Otherwise, bulls may have to wait until the next major support level at $16.66 to initiate a significant reversal.
The Open Interest (OI) data on Coinalyze suggested that Solana could face more selling pressure in the short term. OI on the four-hour timeframe between May 12 and May 25 increased from $205.5 million to $246.5 million, indicating the continuation of the prevailing bearish trend.
The liquidation data from Coinglass further supported the bearish sentiment. Over the past 48 hours, long positions worth $1.92 million were liquidated, compared to just $272.76 thousand worth of short positions.