.jpg)
- Solana continued its downtrend reaching the four-month support range.
- The altcoin’s open interest has shown signs of a potential reversal.
After a promising performance in the first quarter of this year Solana [SOL] It has seen a somewhat slow trajectory over the past few months.
SOL lost nearly 30% of its value over the past month after reversing from the $186 resistance level. Technical indicators indicated extremely oversold conditions at the time of writing and showed signs of a trend reversal.
The currency’s open interest trends have increased over the past month with bullish divergence showing with price action. At the time of writing, SOL is trading at $134.3, down approximately 7% over the past week.
Could Solana bulls spark an uptrend?
Source: SOL/USDT, Hyblockcapital
SOL’s reversal from the $186 resistance confirmed the bearish pressure last month as the coin continued its downtrend and tested the $133 support level at the time of writing.
Here, it is worth noting that SOL held the support range between $126 and $133 for about four months. So, a possible reversal from this range seems possible again.
Meanwhile, the currency’s recent downtrend has created a classic falling wedge pattern on the daily chart.
While the bulls tried to break the series of red candles, they must now hold the support range between $126 and $133 to prevent a major price breakout.
If the bulls can defend this support range, SOL may gather strength to retest the $174 resistance in the coming days.
SOL saw a breakout after the similar falling wedge breakout that occurred last month and posted a 30% gain to test the $186 resistance. Any close above the $141 resistance could confirm upside opportunities.
The Stochastic RSI showed an oversold situation and confirmed a bearish edge at the time of writing. However, it also confirmed the chances of a potential reversal as it witnessed a bullish crossover at press time.
The Cryptocurrency Fear and Greed Index was still in the “Greed” zone, indicating that the uptrend may still be in place.
However, buyers should monitor trading volumes as the coin aims to break out of its current pattern. The inability of the altcoin to support green candles with sufficient volume could lead to a rather short-lived breakout.
Open interest remains stable despite falling prices
Is your wallet green? Check the SOL profit calculator
Open interest (OI) levels on Binance [BNB] It remained stable during the sharp decline in prices. This suggests that despite the decline in prices, there is still significant interest in maintaining positions as traders are likely anticipating a turnaround.
Please note that OI levels remaining stable in isolation is not a bullish signal. But it can confirm the potential for a reversal when supplemented with technical indicators and general sentiment analysis.
