As a seasoned crypto investor with over a decade of experience navigating the volatile cryptocurrency market, I must admit that Solana’s current trajectory has me slightly concerned. The death cross looming on the horizon is a warning signal that I can’t ignore, especially after witnessing its impact in previous market corrections.
On Tuesdays market bounce, Solana’s price experienced a modest 0.65% increase, reaching $132. However, this rise was followed by a long wick, suggesting strong resistance to buying above current levels and possible additional drops as the ‘death cross’ draws near.
Will Solana Price Drop 10%? Death Cross Signals Possible Correction
For the last fortnight, the value of Solana has remained relatively stable, hovering slightly above its significant support level at around $120. At present, neither the bulls nor the bears seem to have enough influence to establish a clear trend, suggesting a period of uncertainty in the market.
Despite the current correction remaining in effect, the daily chart indicates an impending “death cross” of the 50-day and 200-day Exponential Moving Averages (EMA), a first since October 2023. This potential trend reversal should be handled with care as it could amplify the bearish trend, possibly causing Solana’s price to decrease by around 9-10%, potentially returning to the $120 level again.
If the price falls below the $120 support, it may give more power to the sellers, potentially leading to a decrease of approximately 12.5%. This decline could occur as they search for support at the bottom trendline of the range pattern that has been in place since March 2024.
Furthermore, data from Santiment analytics indicates a persistent decrease in development activities related to Solana, spanning from late July to mid-September 2024. This decline is apparent as the development activity metric has dropped substantially following its peak in late July, now standing at approximately 133.66. This lower figure suggests that contributions from developers within the Solana ecosystem have diminished.
This decrease might indicate less activity in current projects, improvements, or overall involvement within the ecosystem. A suboptimal measure of development activity could worry investors, hinting at decreased energy in network actions.
Furthermore, it’s worth noting that the total value locked (TVL) on the Solana network is presently at approximately $4.8 Billion, suggesting a decrease in its momentum. This period of stability suggests that the network may be having difficulty attracting new capital or maintaining existing investments. Prolonged consolidation might indicate waning interest in Solana, potentially leading to further price adjustments for SOL.
Contrarily, should the current support at $120 or below hold steady, I expect the buyers to regain their bullish momentum in the lead-up to the forthcoming breakpoint conference event. This could potentially delay a significant price correction until the integrity of the daily chart’s rectangle pattern remains unbroken.
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2024-09-17 21:43