Solana (SOL) has been making constructive noise just lately with a surge in its worth. Nonetheless, one crypto strategist often called Altcoin Sherpa on the social media platform X, believes that the euphoria could also be short-lived.
Regardless of final week’s notable rally, Altcoin Sherpa argues that Solana remains to be trapped in a downtrend, casting doubts on the sustainability of its present momentum.
Altcoin Sherpa factors out a important resistance degree at roughly $19.50 that Solana should overcome to alter its trajectory. The crypto analyst highlights a regarding sample: Solana has been persistently forming decrease highs since reaching its 2023 peak of $32.30 again in July. This sample suggests that every tried rally has been met with growing promoting strain, elevating questions in regards to the power of the latest restoration.
Altcoin Sherpa advises warning for these contemplating getting into the market, stating:
“It’s good to see some restoration, however each rally in the previous couple of weeks has resulted in only a decrease excessive. Regardless, in case you’re in it for an funding, it could’t be unhealthy to build up sub-$20.”
At the moment, Solana is buying and selling at $19.12, in line with CoinGecko, exhibiting a modest 1.1% acquire within the final 24 hours and a seven-day rally of 4.5%.
Solana Help Hinges On FTX Liquidation
Within the occasion that SOL’s newest rally loses steam, Altcoin Sherpa identifies the $14 degree as a possible help zone. Nonetheless, he underscores a vital issue that might affect Solana’s destiny within the quick time period—the upcoming liquidation of a large Solana stash held by the troubled crypto alternate FTX, amounting to a staggering $1.16 billion. The result of this liquidation may considerably impression Solana’s worth stability.
SOL market cap at present at $8.08 billion. Chart: TradingView.com
Supporting Altcoin Sherpa’s bearish outlook is an evaluation of key technical indicators. The Relative Energy Index (RSI) is indicating a decline in momentum, hinting at a possible downturn for Solana. Moreover, the Superior Oscillator (AO) has ventured into the destructive territory, offering extra validation for the bearish sentiment.
If promoting strain continues to accentuate, Solana’s worth may take a look at the psychological degree of $18.00, hovering across the midline of its present buying and selling channel. In a extra dire situation, SOL may plunge even additional to achieve the decrease boundary of the channel at $17.29.
The amount of lengthy positions which have already been liquidated is 45 instances that of quick positions, in line with the liquidation statistics offered by CoinGlass.
Supply: Coinglass
Potential Turning Level
Nonetheless, there’s a glimmer of hope for Solana buyers. Within the worst-case situation, if the downtrend persists, Solana’s worth may finally discover help within the demand zone, marked by the final candlestick earlier than the exceptional July uptrend started. This space tends to draw patrons and may function a possible turning level for SOL’s fortunes.
Whereas Solana’s latest rally has generated pleasure, warning is suggested, as technical indicators and market dynamics level in the direction of a attainable continuation of the downtrend. The crypto world stays as unpredictable as ever, and buyers ought to fastidiously think about their choices earlier than diving in.
(This web site’s content material shouldn’t be construed as funding recommendation. Investing includes threat. Whenever you make investments, your capital is topic to threat).
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