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Solana’s 14% price drop, prediction and how to profit from the dip

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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

  • The trends in the upper and lower timeframes of Solana prices appeared to be at odds, indicating that a bullish reversal could occur soon
  • The lack of sales volume recently meant the decline could be superficial

Solanas [SOL] network recently saw a significant increase in social media engagement. Much of this can be attributed to the Jito [JTO] air drop. As a result, DEX volume on Solana’s network also saw a huge increase.

Solana’s NFT sales also surged higher last week. In fact, AMBCrypto’s recent report also noted an increase in network activity, with the Solana blockchain ranking #1 for total transactions in November. Despite these developments, the token recently saw a pullback on the price front.

Last November’s outbreak could be completely traced

In a tranquil art style reminiscent of a watercolor painting, a Shiba Inu stands atop a rolling hill and stares pensively at the breathtaking sunset in front of it. The sky is a canvas of warm pastel hues, transitioning from vibrant orange and coral as the sun sets to soft lavender and deep indigo as dusk approaches. Depicted with delicate brushstrokes, the Shiba's coat captures the richness of its red coat as it rustles gently in the evening breeze. His ears are alert, attuned to the sounds of nature. The dog's eyes, dark and reflective, reflect the awe-inspiring colors of the setting sun, revealing a sense of wonder and serenity. The landscape unfolds below, with rolling hills shrouded in verdant greenery and pockets of wildflowers, their petals gently swaying in the breeze. The entire scene exudes a sense of peaceful harmony between the Shiba Inu, the natural world and the enchanting beauty of the setting sun, inviting viewers to pause and enjoy the tranquil moment.

Source: SOL/USDT on TradingView

A range where Solana traded for most of November was highlighted in yellow. It rose from $51.1 to $64. On December 7, SOL broke past the range highs to reach $77.78. Unfortunately, it has declined since then.

The RSI fell below the neutral 50, indicating a shift in momentum in favor of the bears, and the On-Balance Volume (OBV) has also been on a downward trend over the past three days. This suggested that sales volume was stronger. Volatility on Monday rose to $64.18 on the 2-hour chart, which saw a quick rebound.

And yet the two-hour time frame indicated a bearish market structure. The move below the recent higher low at $70 (orange) marked this structural shift. The Fibonacci retracement levels (cyan), plotted based on the rally from the range highs, indicated that $63.11 and $66.24 could be levels where a bullish reversal could occur.

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The drop in Open Interest eased the feelings of market participants

In a tranquil art style reminiscent of a watercolor painting, a Shiba Inu stands atop a rolling hill and stares pensively at the breathtaking sunset in front of it. The sky is a canvas of warm pastel hues, transitioning from vibrant orange and coral as the sun sets to soft lavender and deep indigo as dusk approaches. Depicted with delicate brushstrokes, the Shiba's coat captures the richness of its red coat as it rustles gently in the evening breeze. His ears are alert, attuned to the sounds of nature. The dog's eyes, dark and reflective, reflect the awe-inspiring colors of the setting sun, revealing a sense of wonder and serenity. The landscape unfolds below, with rolling hills shrouded in verdant greenery and pockets of wildflowers, their petals gently swaying in the breeze. The entire scene exudes a sense of peaceful harmony between the Shiba Inu, the natural world and the enchanting beauty of the setting sun, inviting viewers to pause and enjoy the tranquil moment.

Source: Coinalyse

Over the last two trading days, Solana’s price slowly dropped from $7.78 to $70. This was accompanied by a decline in Open Interest (OI). The conclusion from the decline in OI and prices is that market participants are losing their bullishness.

Is your portfolio green? View the Solana Profit Calculator

Surprisingly, spot CVD has moved higher. This is a sign of healthy demand for the token in the spot markets, even if near-term sentiment has been bearish. Therefore, the recent decline could be temporary and superficial. On the higher time frame charts, the $60-$65 zone represents a support zone where bulls could initiate a recovery.

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