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- The breakdown below $20 meant that imbalances on the daily chart to the south could be tested quickly.
- Solana’s lower timeframe bias was also strongly bearish.
Solana presented a worrying opportunity on the price charts. The performance in January was remarkable, but the sharp drop below the psychological $20 level meant that the bears were extremely dominant. Bitcoin’s price chart also failed to inspire bullish confidence.
Read Solana’s [SOL] Price Forecast 2023-24
The next support levels are around $17.7 and $15. These are significant levels where the bulls could make a comeback, but it was likely that a retracement to $12-$14 was on the cars.
Could Solana recover all of January’s profits?
Source: SOL/USDT on TradingView
The range Solana traded from mid-January to recently extended from $20.45 to $26.05, and the average range was at $23.55. In recent days, selling pressure forced SOL to drop below the $22.5 support level and towards $20.
The bears also managed to break the range lows. In addition, they managed to quickly penetrate the support area and overwhelm the buyers. The drop of $20.45 created an imbalance in the charts even though the daily session had not closed at the time of writing.
This gap in fair value rose to $19.74 and could therefore be filled in the coming days. In addition, the red-marked daily bearish breaker block would likely be retested as well.
Previously, this region has been a bullish order block, converging on a six-week range.
Realistic or not, here is the market cap of SOL in terms of BTC
Therefore, any retests of the $20-$21 area will likely give short sellers a chance to enter the market, with voids above $21.7. The RSI has been below the neutral 50 for more than a week, agreeing with the bearish bias, and the OBV has also slowly fallen over the past two weeks.
Long positions saw major liquidations after the drop below $20
Source: Coinalyse
The 15-minute chart showed falling prices and outstanding interest over the past few days. This indicated continued bearish sentiment and discouraged long positions. With the fall below the $20.5 support, long positions were liquidated in bulk.
On March 8, there were three individual 15-minute sessions in which long positions worth more than $400,000 were liquidated. This further fueled selling pressure behind Solana, while the financing rate slipped into negative territory as prices plummeted.