Solanas Bearish Trend: Should Traders Cancel Shorts As Volume Declines?
- Solanas trading volume drop sparks concerns, with bearish signals intensifying as resistance levels hold strong.
- Alan Santana notes a bearish shift in Solana, contrasting stable 2023 volume with a declining trend in 2024.
- Decreased volume near resistance suggests weakening buyer interest, indicating possible downward pressure for Solana.
The trading volume drop of Solana is now causing some concerns among the traders.In a recent X post, Alan Santana maps the current volumes against those from 2023, leading to a potential change in Solanas price path. However, while Bitcoin is having a good time, SOL market indicators look more like a bearish picture, with declining trading volumes and persistent resistance levels keeping the asset under pressure.
Solanas trading volume was relatively stable between September and November 2023, prior to the beginning of a major bullish surge which propelled the asset upward. This surge suggested that investors were regaining confidence, and thus, buying capability, which is beneficial for Solanas price increase. Nevertheless, the trading volume on SOL has declined from August to October 2024. Santana sees this as bearish because the waning interest of buyers may be an indication of price drop.
Bearish Momentum In Solana
Loss of volume near important resistance levels may signal a declining buying pressure that is often accompanied by bearish pressure that breaks out downward. This change from an enthusiastic volume increase in 2023 to a bearish volume contraction in 2024 paints a rather bearish picture for SOL in the near term.
The trading strategy focuses on the support and resistance level, which is a key indicator in deciding the direction of SOLs market. The analysis shows that Solana is trading beneath a crucial resistance line that has dominated trading action in a way that has pushed prices down toward supports. In concert with the decreasing volume, this pattern fits into the bearish view, meaning that the asset may lack the drive to push higher volumes without a significant change in the volume trend.
Managing Risk In Downturns
In a bearish market, the most reasonable thing to do is to keep on selling short in order to make profit from the downturn. When the price and volume of Solana changes, traders are able to manage their positions, and may have to incur losses, before reconsidering their approach. At the time of writing, SOL is at $181.06, a 2.28% rise within a single day.
Source: TradingView
The analyst, however, notes that leveraged trading needs experience and understanding of the risk management principles to manage risks in volatile markets for instance cryptocurrencies. Picking on the bearish signs for SOL, the traders shoulf careful and not to make hasty decisions.
Read more: https://www.tronweekly.com/solanas-bearish-trend-should-traders-cancel/
Text source: TronWeekly
