Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Solana bulls fought desperately to defend a higher timeframe support zone.
- A drop below $20 could mean a further 15% drop for SOL.
Solana [SOL] saw a strong sell-off in mid-August. This bearish sentiment also spread to the rest of the crypto world, driving prices down. The NFT space performed well. A recent report highlighted an increase in sales volume a few days ago. However, sentiment on the price chart slanted in favor of the bears.
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SOL was trading within a higher time frame area of interest. It would be critical for the bulls to defend the $20 area and bullish the market structure on the lower time frames with a move past $22.
A drop below $20.2 could cause SOL prices to drop to $17
![Solana [SOL] is showing a strong bearish trend as buyers struggle to defend USD 20](https://i0.wp.com/statics.ambcrypto.com/wp-content/uploads/2023/08/PP-2-SOL-price-1.png?resize=1170%2C663&ssl=1)
Source: SOL/USDT on TradingView
The USD 20.26-$22.3 area was highlighted in cyan to delineate a bullish breaker block within the one week time frame. The 1-day chart showed that the market structure has been bearish since the beginning of August and SOL has been in a downward trend. The simple moving averages and the RSI also reinforced the idea of bearish momentum.
The DMI showed a strong downward trend on the daily chart, with both the -DI (red) and ADX (yellow) moving above 20, confirming the inference from the price chart. The OBV has also slowly fallen over the past two weeks.
The Fibonacci retracement levels (light yellow) showed that the 61.8% and 78.6% levels at USD 20.18 and USD 16.94 could serve as support. However, a daily session closing below USD 20.26 would break the weekly breaker block and signal bearish intent. This would show that a move to $16.94 would likely follow in the coming weeks.
Over the past 24 hours, bearish sentiment has once again taken control
![Solana [SOL] is showing a strong bearish trend as buyers struggle to defend USD 20](https://i0.wp.com/statics.ambcrypto.com/wp-content/uploads/2023/08/PP-2-SOL-coinalyze.png?resize=1170%2C669&ssl=1)
Source: Coinalysis
On August 25 and 26, Solana bulls were able to defend the USD 20.2 support and managed to force a brief rally that reached USD 20.92. This temporary interruption caused an increase in Open Interest, but it was short-lived. The OI started falling again alongside prices, which showed bearish sentiment and discouraged short-term longs.
How much are 1, 10 or 100 SOL worth today?
Contrary to this view, the spot CVD has been moving up slowly but steadily since August 18. There were hours of intense selling, but demand seemed to be creeping in. This fueled the optimistic hope that a recovery was possible.
A jump to $20.9 and $22 was the potential near-term bullish scenario, but traders and investors should also be prepared for the bearish scenario.