• Solana [SOL] saw increased network usage but prices followed a downward trend.
• The market structure was bearish with a strong confluence of resistance at $21.8-$22.5 and the RSI below neutral 50.
• Despite a bounce from the $20 area, demand was not hefty as evidenced by the OBV failing to rise past its resistance level.
Solana [SOL] Price Trend
Solana [SOL] saw increased network usage after transaction fees heightened on Ethereum [ETH] and Bitcoin [BTC]. Yet, despite the influx of users, other metrics such as TVL were in a downtrend. The prices also followed the same path, with bearish momentum still in power on the 12-hour chart. There was a bounce from the $20 area, however demand was not hefty as evidenced by OI failing to rise above its resistance level.
The 4-hour chart showed a strong confluence of resistance at $21.8-$22.5, which has higher chances of facing rejection if moved into this zone. Meanwhile, the $21.33 level offered stern resistance on the lower timeframes, but sentiment favored buyers in the short-term.
Funding Rate Impact
On 7th May, the funding rate fell into negative territory but quickly climbed back above zero indicating that speculators likely hedged their short positions when SOL fell to $20 before recovering again soon after .
So far sellers have been dominating whilst bulls cling to $20 support but demand is conspicuous by its absence making it unlikely for SOL to break up past its current resistances anytime soon unless buyers can show more strength and cause an increase in demand for SOL tokens..
The information presented does not constitute financial, investment, trading or any other type of advice and is solely writer’s opinion