The decline in Solana trading volume is causing concern and the bearish signal is increasing as resistance levels remain strong. Alan Santana points to a bearish shift in Solana, contrasting stable volume in 2023 with a declining trend in 2024. Decreasing volume near resistance suggests waning buyer interest and could put downward pressure on Solana.
Solana’s declining trading volume is currently causing concern among traders. In a recent X post, Alan Santana compares current volumes to volumes from 2023, indicating a possible change in Solana’s price path. However, despite Bitcoin’s strong performance, SOL market indicators are looking rather bearish, with the asset continuing to be under pressure due to lower trading volumes and persistent levels of resistance.
Solana’s trading volumes were relatively stable from September to November 2023 before a major bullish surge began that pushed the asset higher. This surge suggests that investors are regaining confidence and therefore the ability to buy into Solana’s rising prices. Despite this, SOL’s trading volume decreased from August to October 2024. Santana sees this as bearish, as waning buyer interest could be a sign of falling prices.
#altcoin | #SolanaWhale ✴️ Bitcoin bullish = Solana bullish? Cancel short?
Compare Solana’s trading volume from September to November 2023 to its trading volume from August to October 2024.
➖ Volume is increasing from September to November 2023, which precedes a strong bull market. pic.twitter.com/B5l0S2x1UJ
— Alan Santana (@lamatrades1111) October 29, 2024
Solana’s bearish momentum
Decreasing volume near a key resistance level can indicate decreasing buying pressure, and is often accompanied by bearish pressure to break to the downside. This shift from enthusiastic volume growth in 2023 to bearish volume contraction in 2024 paints a fairly bearish picture for SOL in the short term.
The trading strategy focuses on support and resistance levels, which are key indicators in determining the direction of the SOL market. The analysis shows that Solana is trading below a key resistance line that has dominated trading action in a way that pushed the price down towards support. Combined with decreasing volume, this pattern fits into a bearish view. In other words, if there is no significant change in the volume trend, the asset may lack the impetus to increase volume.
Risk management during recession
In a bear market, it makes the most sense to remain short in order to profit from the decline. If Solana’s price and volume change, traders can take control of their positions, but may have to take losses before reconsidering their approach. At the time of writing, SOL was at $181.06, up 2.28% in one day.
Source: TradingView
However, analysts note that leveraged trading requires experience and an understanding of risk management principles to manage risk in volatile markets such as cryptocurrencies. Traders who notice bearish signs in SOL should be careful not to make hasty decisions.
