SOL has been volatile over the past five days. The altcoin rallied from $167 to $185, after which it gave back those gains on the charts.
Its heightened volatility may be related to the approval and trading of an Ethereum [ETH] spot ETF that began on July 23. Speculation that SOL would be the next ETF sparked positive sentiment and gains, although their collective impact didn't last long.
The RSI is above the neutral 50, reflecting bullish sentiment. OBV slowly climbed higher in July, and despite the recent pullback, the trend has not stopped. A CMF above +0.05 indicates stable and significant buying pressure. These are the signals swing traders can expect if the range low is to be defended.
Development activity has declined since June. The indicator’s value of 24.62 is lower than Ethereum’s 44.95 and Cardano’s [ADA]’s 77.83. Instead, weighted sentiment jumped into positive territory. Combined with the results of technical analysis, these indicators point to a pickup in market sentiment. SOL's increasing social dominance will further fuel the bullish narrative, but for now, that doesn't seem to be helping.
The 3-month lookback period of the SOL Liquidation Heat Map highlights $170 and $185 as the next areas of concern. The $165 and $150-$155 levels are also potential locations where the downtrend could reverse. They converge with technical support levels. Range formation may continue since the breakout of the $170 liquidity zone, but indicators and sentiment are positive.
Liquidation levels suggest things may be taking another turn. Cumulative liquidation levels are increasingly negative, indicating that short positions are becoming increasingly dominant. If the price consolidates in the $165-$167 range and attracts more short sellers, it will trigger more short liquidation. A short-term bullish reversal could squeeze these short positions, leading to a successful defense of the range low.
Overall, traders can expect a rebound near $165, but should also be prepared for a range breakout.
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