•Solana [SOL] swiftly rose from $20 to $25 on Friday, 20 January, however, a crucial short-term supply zone is blocking its upward price action.
•Fed watchers expect a dovish announcement from next week’s FOMC meeting. If their bets are confirmed, the markets could be triggered positively, tipping Bitcoin [BTC] and the rest of the altcoins for another round of price rallies.
•The Relative Strength Index (RSI) and On Balance Volume (OBV) indicate a genuine demand and rising buying pressure. If the trend is sustained, SOL could bypass the supply zone and move near the supply zone’s lower boundary of $24.60.
Solana (SOL) experienced a swift surge in its price on Friday, 20th January 2021, shooting up from $20 to $25. However, the price has been blocked by a crucial short-term supply zone and the digital asset is now trading at $24.10. Investors are keeping an eye out for the upcoming Federal Open Market Committee (FOMC) meeting next week, as Fed watchers expect a dovish announcement. If this prediction is proven correct, the markets could be triggered positively and could result in another round of price rallies for Bitcoin (BTC) and other altcoins such as SOL.
Analyzing the three-hour chart for SOL/USDT on TradingView, the Relative Strength Index (RSI) is indicating a neutral structure with a reading of 49 and hovering near the mid-level of 50. Despite this, the RSI has experienced a slight increase, accompanied by a rise in On Balance Volume (OBV), which is a sign of genuine demand and a rise in buying pressure. If the trend is sustained, the RSI could crossover the mid-level and push SOL to overcome the $24.33 hurdle and move near the supply zone’s (red) lower boundary of $24.60.
However, for SOL to break out of the supply zone, Bitcoin must exceed the $23.5K level. If this is achieved, SOL could retest the overhead resistance at $26.61. On the other hand, if bears push the price of SOL below the demand zone (green), the bullish bias would be invalidated.
Overall, SOL is in a neutral structure on the three-hour chart and the Funding Rate remains positive despite a slowed development activity. Investors are awaiting the outcome of the FOMC meeting next week, which could trigger another round of price rallies for Bitcoin and other altcoins. The Relative Strength Index (RSI) and On Balance Volume (OBV) are signalling an increase in buying pressure and if the trend is sustained, SOL could overcome the supply zone and move near the supply zone’s lower boundary of $24.60.