As an experienced analyst, I believe that Solana’s recent price action is indicative of a potential reversal in the near term. The cryptocurrency has hit a key support level at around $120, which is a 5-month resistance turned support after the sharp correction from April. This level has proven to be a significant point of accumulation for investors during market corrections, suggesting that buyers are actively entering the market.
On Tuesday, the cryptocurrency market experienced a significant sell-off instigated by Bitcoin‘s price decline to $60,000. Solana, among other top altcoins, suffered an 11% intraday loss as a result. The downward trend suggests that sellers may continue driving the market in the short term, potentially leading to a more extended correction.
Potential Reversal on the Horizon as SOL Hits 5-Month Support Level
In April, the cryptocurrency Solana underwent a significant decline in value. This downturn was triggered by heightened market uncertainty surrounding the Bitcoin Halving event. As a result, the price of Solana dropped from $204 to its current trading price of $122, representing a 40% decrease in value.
A examination of the day-to-day graph reveals that the descending price pattern has been challenged by an unbroken uptrend line dating back to late November 2023. The coin’s value bounced back multiple times from this support level, suggesting significant buying activity from investors during market dips – a noteworthy sign of a developing bull run.
The correction’s instability above the 50% Fibonacci retreat mark implies a beneficial pause for purchasers, empowering them with control in the market.
If the demand pressure holding at the mentioned trendline remains strong, the Solana price is expected to prevent a decline below this level of support. Therefore, the position of the coin above the support trendline will be essential for both current Solana holders and prospective buyers in the upcoming weeks.
If the altcoin goes against the trend and falls below its dynamic support with a closing of the daily candlestick, this could signal that sellers are taking over, potentially leading to a prolonged correction. The value of the asset might then drop down to around $98.5.
Technical Indicator
- Exponential Moving Average: A 20-day EMA slope which currently acts as a dynamic resistance will be among the initiated breakout if the SOL price witnessed renewed recovery.
Relative Strength Indicator: The falling RSI slope heading close to oversold indicates a suitable buyer opportunity.
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2024-04-30 23:21