Solana (SOL) has found itself in the middle of a price battle, with neither bulls nor bears able to establish dominance. The daily chart has revealed a story of indecision, characterized by the formation of neutral doji candles. This hesitation in price action follows a previous sharp decline, indicating that the bearish momentum is slowing down.
Despite cautious optimism among bulls, recent price action has not been encouraging. The $21 resistance level proved to be a formidable barrier that buyers struggled to break. This resistance level has been a major focal point for traders, as it represents an important milestone for SOL’s bullish aspirations.
SOL is currently trading at $19.05 according to CoinGecko, which represents a 1.6% decline over the past 24 hours and a 5.2% decline over the past seven days. While these figures may seem discouraging, there is still a ray of hope for those betting on a bullish reversal.
Solana Watch: Key metrics to watch
Amidst the market uncertainty, technical analysts have identified an interesting pattern on the daily time frame charts – a possible inverse head and shoulders pattern. This pattern is often treated as a bullish reversal indicator, and its completion could signal better days ahead for SOL.
The pattern consists of three main parts: a left shoulder, a head, and a right shoulder. The recent decline in SOL price is seen as the completion of the right shoulder, setting the stage for a potential rally. The key support level to watch is $19, which if held, could pave the way for SOL to retest the neckline resistance at $20.80.
SOL records a market cap of approximately $8 billion today. Chart: tradingview.com
indicator signal caution
While the inverted head and shoulders pattern offers a glimpse of hope, traders should remain cautious. The Relative Strength Index (RSI) has remained below the neutral 50 level in recent days, suggesting that bearish sentiment still dominates. Additionally, on-balance volume (OBV) has struggled to break local resistance despite multiple attempts in September, indicating that sellers may still have the edge.
SOL seven-day price movement. Source: Coingeco
The price report states that SOL would need to clearly break the $18.58 level for the market structure to turn bearish. Until then, the possibility of SOL forming a short-term consolidation range before a potential upward move remains on the table. However, current evidence suggests that sellers are not ready to give up control just yet.
The emergence of the inverted head and shoulders pattern provides a ray of hope for bullish traders, but caution is advised as key indicators indicate ongoing uncertainty in the market. The coming days will likely determine whether SOL can break free from its current range and head towards higher prices.
(The content of this site should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
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