SOL-“Short-Coverings Advised”

4-Hour Analysis:

Big Picture: For a few sessions now, Solana has been under constant downward pressure. However, it is about to retest November’s lows. It has begun to honor these supports with sideways price action. This might lead to a potential double bottom formation. As a result, fresh selling in this region may slow and price may take a breather. Furthermore, dynamic resistances are trailing aggressively, and if Solana can get access above them, a significant wave of short-coverings could occur.

On the Upside several resistances occupy the 11.40 to 11.70 range. Buyers must ensure a foothold above these levels in order to make a reasonable attempt on the upside. Unless and until this occurs, 11.70 will effectively cap the upside. Strength over 11.70 will initially allow a recovery back into 12.05 and 12.40 levels. Regaining control over 12.40 will confirm the double bottom formation and may channel the start of a corrective phase for Solana. However, 11.70 remains the critical level for the time being.

On the Downside 11.10 and 10.90 are expected to provide solid support. Maintaining these low levels is critical in order to prevent any major sell-off in the pair. Lower-time frames are currently seeing the development of bullish divergence, indicating that the current move is losing momentum and could be reversed. However, in order for sellers to maintain control, they must breach 10.90 and keep prices lower in order to bleed Solana towards the 9.20 level.