Solana (SOL) recently experienced a significant rally, breaking above the $65 resistance level against the US Dollar. This bullish move propelled SOL’s price to new heights, outperforming popular cryptocurrencies like Bitcoin and Ethereum. The bulls even managed to push the price above $68.16, creating a new high for SOL. However, after this impressive surge, the bears made their presence known.
Following the rally, the price of SOL began to correct its gains and is now trading below $60 and the 100 simple moving average (4 hours). This correction has raised concerns among investors as SOL’s value continues to slide. Furthermore, a break below a short-term rising channel with support around $58.00 on the 4-hour chart of the SOL/USD pair confirms the bearish sentiment.
The current situation suggests that SOL might slide even further below its key support levels, particularly the $50 mark. This potential downward move could take place in the coming sessions, significantly impacting SOL’s overall performance.
After taking a dive, SOL has entered a consolidation phase, with its price now ranging within a certain threshold. The immediate resistance level stands at $59.50, which is close to the 50% Fibonacci retracement level of the downward move from the $68.16 swing high to the $51.23 low. Another major resistance level lies near $60.00, followed by $62.00, and eventually $68.50.
A successful close above the $62.00 resistance would indicate a positive momentum shift and potentially lead to a larger increase. In such a scenario, SOL could target the $72.00 level. However, if SOL fails to recover above the $60.00 resistance, the price may continue to decline.
In case of a further downward movement, the initial support level for SOL is at $55.00. The first major support lies near $51.20, a breach of which could result in a test of the $50 mark. If the price closes below this crucial support level, it might experience a decline towards $45 in the near term.
Analyzing the technical indicators, the 4-hour MACD (Moving Average Convergence Divergence) for SOL/USD now suggests a loss of pace in the bullish zone, indicating a potential bearish trend for SOL. Furthermore, the 4-hour RSI (Relative Strength Index) for SOL/USD is currently below the 50 level, further reinforcing the bearish sentiment.
While Solana initially showcased a powerful rally, surpassing major resistance levels and delivering substantial gains, the recent correction has raised concerns among traders and investors. The possibility of SOL sliding below the $50 support level looms large, with the price currently consolidating and trading below the 100 simple moving average (4 hours).
Investors should pay close attention to SOL’s ability to recover above the $60.00 resistance level, as this will crucially affect the cryptocurrency’s future trajectory. On the downside, support levels at $55.00 and $51.20 should be closely monitored, as a breach of these levels may intensify the selling pressure and contribute to a potential decline towards $45. As always, it is essential to consider the broader market conditions and consult various technical indicators before making any investment decisions involving SOL.
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