SOLANA mid term outlook
SOL/USD, 1D
Bearish
Current daily candle looks to be closing bearish right now with no changes in overall sentiment
So far so good, volume has started to flat line as we made a lower low but momentum still looks weak and this short term bounce has been met with instant resistance, move still in play to move lower IMO
Solana has seen a massive 220%+ recovery since the SBF saga whilst the rest of the market also had a small relief rally, however…….. these bear market rallies don’t last for ever and one thing to keep a close eye on is trading volume and momentum using your choice of oscillators.
Major over head resistance marketed around $26.83 just shy of $27 while some divergence is created as you can see using the CCI.
With volume dropping it generally signifies that we wont have the momentum needed to break a key level of resistance and there for likely to print some bearish signals that a short to mid term reversal is coming.
Either we see a descent retracement to some key fib levels around $15 and the market remains bullish and we have another run at trying to break $27 or the support at these levels fail and we move down to retest the lows sub $10.
Not ruling out a deep retest around $5 from a key level of market structure put in from the 2020-21 run up, as this macro market cycle is not finished yet as we haven’t gone through that boring dead phase of the market with liquidity really dries up.
What does this mean for the NFT market?
Unfortunately outlook is not good short term due to the nature of arbitrage of denomination in SOL, as the USD value of SOL drops the USD value of the NFTs will drop, causing panic and hedging as people sell their jpegs to USD and due to illiquidity we see a lot of undercutting and volatility to the downside.
The good news is, this will present a lot of descent buying opportunities into your favourite blue-chip at a descent discount, just pick wisely as we could see a lot of projects crumble if we see another bearish trend across the market.