The crypto markets are recovering from the recent sell-off, while the Bitcoin dominance is marking new highs. At 57.76%, huge liquidity has been flowing within the star token, due to which the other altcoins within the top 10 seem to be stuck within a narrow range. Solana has been forming more or less a similar chart to Bitcoin and hence the recent rebound does not appear to support a strong bullish narrative. Therefore, the market participants need to remain vigilant over the next few hours as the current trade setup points towards a rejection of the lower support zone.
Now the question arises: whether you need to be still bullish on Solana?
The FOMC meeting is about to occur in the coming week, which is believed to have raised the volatility levels within the market. Although the BTC price has reclaimed $60,000, the markets do not appear to have flipped from the bearish influence. Therefore, the SOL price may also form yet another lower high, as it has in the past few months. With the technicals turning bearish, the price is now believed to lose ground and hit the lower support.
The short-term price action suggests the bears are slowly regaining momentum as the price is facing some upward pressure. The rebound from the lower band of the Bollinger was expected to push the levels to the resistance; however, it seems to be a tedious job. The SOL price is about to plunge back below the average bands as the RSI has shown bearish divergence. Meanwhile, the volume has dropped to a large extent, which may keep the hopes of a bullish continuation as the long-term trade remains bullish.
The weekly chart of SOL prices suggests a decent pullback could be fast approaching as the selling pressure has faded. Moreover, the MACD is heading towards a bullish crossover, which may occur by the end of September. Besides, the DMI levels do not display much divergence as the +Di & -Di are moving within a predetermined range. Therefore, the SOL price is required to close the weekly trade above $140, otherwise, the token may fall back to $120.
However, the support has been tested multiple times and hence may have become a little brittle. Besides, the bulls do not appear to carry enough strength and as a result, the Solana (SOL) price rally may remain passive as the pivotal resistance at $160 appears to be in the long haul.
