How Low Can the Solana Price Drop?

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As a seasoned analyst with years of experience navigating the volatile waters of the cryptocurrency market, I find myself cautiously optimistic about Solana’s near-term prospects. The current sell-off, while disheartening for many investors, seems to be a temporary correction rather than the beginning of a bearish trend.

The price of Solana hasn’t lagged in the current downtrend across the cryptocurrency market. This slide primarily stems from crypto investors cashing out after Bitcoin failed to sustain its recent surge to a new peak, triggering a wave of profit-taking. Given this situation, one might wonder how much lower the Solana price could fall and if it’s an opportune moment to invest during the dip.

Solana Price Technicals Suggest The Crash Will Be Brief

The price of SOL has declined by 17.6% from its peak this year, as it temporarily paused its robust surge. This fall occurs simultaneously with Bitcoin and other digital currencies. Currently, Bitcoin is trading below $100,000, while the combined market capitalization of all cryptocurrencies stands at approximately $3.65 trillion.

Based on technical analysis, it appears that the drop in Solana’s price might be temporary. On the daily chart, we can observe that the coin has established some level of support near its 50-day Exponential Moving Average. Moreover, a false breakdown occurred below the support at $209.39, which represented Solana’s highest swing in March this year, suggesting it may have been an unsuccessful breakout rather than a definitive trend change.

After a shift, Solana’s price action seems to have created a chart pattern known as a “break and retest.” In this scenario, an asset returns to revisit a former support or resistance level that it previously breached. This pattern is commonly recognized as a strong continuation signal in the market.

Additionally, it’s worth noting that Solana appears to have created a bullish flag chart formation, which typically signals a continuation. This pattern consists of a tall upright section followed by a downward slope or channel. Generally, when this pattern materializes, an asset often persists with its initial upward trend.

In recent months, Solana has displayed an upside-down “head and shoulders” chart pattern too, suggesting potential further price increases might be on the horizon.

Based on current trends, it’s likely that Solana’s (SOL) value could rebound in the upcoming days. If this occurs, a key level to monitor would be approximately $235, which represents the upper boundary of the descending channel. Should SOL break above this point, we could see a surge toward its year-to-date high of $263.95.

If the price drops lower than Monday’s low of $204, it suggests a continued downtrend, possibly reaching $193, which was the peak on June 29. Should that support be breached, the next potential level could be at $155, as seen on November 4.

Crypto Analysts See SOL Price Crash Being Brief

According to many cryptocurrency experts, the current crypto market downturn is likely temporary. In a recent post on The Moon Show, a well-known crypto analyst, suggested that Solana’s price trend remains optimistic and has yet to achieve a bullish breakout. He anticipates a forthcoming bullish breakout at around $295, based on the symmetrical triangle pattern visible on the four-hour chart.

Many experts agree that Solana’s price strength isn’t just due to its technical aspects; it also boasts robust foundational elements. Currently, Solana ranks as the second largest blockchain within the DeFi sector, following Ethereum, with an impressive $8.8 billion worth of assets under its management.

The DEX protocols running on the Solana network are experiencing significant transaction volume. In fact, they processed a staggering $34 billion worth of coins over the past week, surpassing Ethereum’s $24 billion. This impressive performance has some analysts predicting that the price of SOL could reach as high as $500 by the end of this year.

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2024-12-10 14:16