- Solana has a bullish market structure in the long term.
- The drag overhead could be retested based on the findings from the liquidation heatmap.
Solana [SOL] managed to address the downtime issues a month ago and maintained consistent uptime in April. However, price action remained disappointing and there was a bearish bias among traders.
A recent AMBCrypto report noted that there were more seven-day NFT transactions on Solana than Ethereum [ETH] and Polygon [MATIC].
Solana’s revenue also rose 33.3%, but the memecoin frenzy was fading. This caused decentralized exchange volumes to drop and total value to lock in (TVL).
The difference in fair value could pose a significant challenge
Source: SOL/USDT on TradingView
Solana’s long-term trend was bullish after the rally in late February and March. Still, the short-term bias was bearish. This was due to the series of lower highs and lows that SOL formed in April.
The RSI reading was 45, but was below neutral 50 for most of April. This underlined the bearish momentum. The OBV was also in a downtrend and was at a resistance level at the time of writing.
Moreover, there was a gap in fair value (white box) in the $160 zone. This region served as support in March and now functions as resistance.
The Fibonacci retracement levels (light yellow) at $141.15 and $122.38 would likely be tested in the coming weeks before bulls could reverse the trend.
Liquidity in the North could see a rapid turnaround
The liquidation heatmap showed that the $143-$145 would provide a significant liquidity pool in the near term. In recent days, SOL has seen a retreat from $157 to $145 to gather this liquidity.
In the North, the $160 level saw a large concentration of liquidation levels.
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Therefore, it was likely to be a magnetic zone that would attract Solana prices in the coming days. This would likely be followed by another reversal as SOL likely did not have the strength to establish an uptrend.
On the other hand, if the USD 165 level were to be breached, the USD 180 region would become the next target.
Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer.