Solana [SOL] cuts into last week’s gains, retests 50% Fib level

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

SOL shrank 9% in the last 24 hours. Falling open interest rates and stock market rout could prolong the downtrend.

Solana’s [SOL] market structure could continue to benefit the bears from a macroeconomic perspective. Macroeconomic uncertainty is increasing as Fed watchers worry that its aggressive rate hikes to tackle stubborn inflation will continue for longer.

The recent momentum in equity markets has slowed as most indexes closed in the red on Tuesday. Bitcoin [BTC] also failed to maintain the $25,000 level again and was trading at $23.97k at press time, sending the altcoin market into retracement.

SOL reaches 50% Fib level – Can the bears prevail?

Source: SOL/USDT on TradingView

So far, SOL has struggled to break above the $27 hurdle – a major selling pressure even in the three-hour time frame. The recent rejection of the price at this level has seen SOL fall 9% and retest the 50% Fib level at press time.

Given the market rout, the bears could benefit more if the 50% Fib level is broken. So, they could target the 38.2% Fib level at $22.53 or the 23.6% Fib level at $21.44. However, an extreme dowsing could drive SOL towards $17 or $15.

Bulls could target overhead resistance at $27 if the market rallies, especially if BTC hits $25k again and the 50% Fib level proves stable. Bulls should take hold if the 50% Fib level is not breached.

The RSI was at 50, indicating a neutral structure that could move in either direction. Investors should therefore monitor the price performance of BTC.

SOL’s open interest (OI) declined

Source: Coinglass

SOL’s OI peaked on 21 February before declining thereafter, highlighting the prevailing bearish sentiment. If the OI continues to fall after SOL closes below $23, the extremely bearish sentiment could undermine the bulls’ chance of a rally at the 50% Fib level. Such a move would provide the bears with further opportunities.

Moreover, according to Coinanalyze, over $2.5 million worth of long positions have been liquidated in the last 24 hours, adding to the bearish sentiment and leverage for short sellers.

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