Solana [SOL] Blocked By A Short-Term Supply Zone – Can Cops Bypass It?

Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and solely represents the opinion of the author

• SOL was situated in a neutral structure on the three-hour chart.
• Funding rate remained positive despite slowing development activity.

Solana [SOL] quickly rose from $20 to $25 on Friday, January 20th. After that, a crucial short-term supply zone comprehensively blocked its price action to the upside. At press time, SOL was trading at $24.10 and still had to contend with the aforementioned supply zone.

read Solana [SOL] price prediction 2023-24

Fed watchers expect a dovish announcement from next week’s FOMC meeting. If their bets are confirmed, the markets could be positively triggered and tip bitcoin [BTC] and the rest of the altcoins for another round of price rallies.

But a hawkish FOMC release would erase recent gains and send markets into a temporary correction, which would also affect SOL.

Supply Zone Blockade: Can Cops Overcome It?

Source: SOL/USDT on TradingView

On the three-hour chart, the Relative Strength Index (RSI) is at 49 and resting near the mid-level of 50, showing a neutral structure.

However, it had retreated from the bottom accompanied by a rising On Balance Volume (OBV), indicating genuine demand and increasing buying pressure.

If the trend continues, the RSI could surpass the median level and push SOL to clear the $24.33 hurdle and approach the (red) lower border of the $24.60 supply zone.

How much is 1,10,100 SOL’s worth today?

However, bypassing the $24.60 – $25.42 supply zone can only happen if BTC surpasses the $23.5k level. SOL could retest the overhead resistance at $26.61 if it clears the supply zone blockade.

But the above bias would be invalidated if bears depreciate SOL above the $23.3-$23.8 demand zone (green). The decline could be contained by the 75-period EMA (exponential moving average) or the $22.67 support level.

Development activity slowed, but demand remained impressive

Source: Santiment

According to Santiment data, SOL development activity continues to increase, which improves investor confidence as indicated by the improvement in weighted sentiment. However, at press time, development activity has remained relatively flat as prices have fallen, reducing investor confidence in the process.

But the funding rate remained positive, indicating genuine demand in the derivatives market and a bullish outlook for the asset. Hence, SOL might be inclined to clear its resistance levels on its upside path.

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