The first strong support area for Solana (SOL) can be found around the $144 value level. Here’s why:
Impressive Support Zone: SOL has a significant support zone at $144. This level contains the second-largest high volume node in the extended 2021 Volume Profile and aligns with the weekly Kijun-Sen1. The Kijun-Sen being in a flat condition for an extended period adds weight to its support strength.
Oscillator Signals:
Relative Strength Index (RSI): The RSI is currently testing the first oversold level in a bull market (50). This is the first time it has done so since July 16, 2021. The RSI being near 35 suggests that SOL is slightly below the neutral zone, which is exceptionally positive for bulls.
Composite Index: There is a hidden bullish divergence between the candlestick chart and the Composite Index. Hidden bullish divergence occurs when price action prints higher lows while an oscillator prints equal or lower lows. Additionally, the Composite Index hit a new all-time low, indicating potential bullish momentum.
Short-Term Outlook:
If SOL maintains the support between $140 and $150, a strong bounce is expected to rally toward the $200 value area in a short period of time.
However, any near-term bullish bias will be invalidated if Solana price has a weekly or daily close below the weekly Kijun-Sen at $140.
Remember that technical analysis provides insights, but market conditions can change rapidly. Always consider other factors and use multiple indicators for a comprehensive view of price movements. 🚀