Solana (SOL) has been making optimistic 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 continues to be trapped in a downtrend, casting doubts on the sustainability of its present momentum.
Altcoin Sherpa factors out a essential resistance degree at roughly $19.50 that Solana should overcome to vary 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 rising promoting stress, elevating questions in regards to the power of the current 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 few weeks has resulted in only a decrease excessive. Regardless, when you’re in it for an funding, it could actually’t be unhealthy to build up sub-$20.”
At the moment, Solana is buying and selling at $19.12, in keeping with CoinGecko, exhibiting a modest 1.1% achieve within the final 24 hours and a seven-day rally of 4.5%.
Solana Assist 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 approaching liquidation of an enormous Solana stash held by the troubled crypto alternate FTX, amounting to a staggering $1.16 billion. The end result of this liquidation may considerably affect 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 detrimental territory, offering further validation for the bearish sentiment.
If promoting stress continues to accentuate, Solana’s worth may check the psychological degree of $18.00, hovering across the midline of its present buying and selling channel. In a extra dire state of affairs, 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 keeping with the liquidation statistics supplied by CoinGlass.
Supply: Coinglass
Potential Turning Level
Nonetheless, there’s a glimmer of hope for Solana traders. Within the worst-case state of affairs, 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 would possibly function a possible turning level for SOL’s fortunes.
Whereas Solana’s current rally has generated pleasure, warning is suggested, as technical indicators and market dynamics level in direction of a attainable continuation of the downtrend. The crypto world stays as unpredictable as ever, and traders ought to fastidiously contemplate their choices earlier than diving in.
(This website’s content material shouldn’t be construed as funding recommendation. Investing includes danger. Once you make investments, your capital is topic to danger).
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