NewsBTC 2023-09-18 14:00:09

Solana Seeing Dark Clouds? Trader Predicts Steady Bottom Formation

Solana (SOL) has been making positive noise recently with a surge in its price. However, one crypto strategist known as Altcoin Sherpa on the social media platform X, believes that the euphoria may be short-lived. Despite last week’s notable rally, Altcoin Sherpa argues that Solana is still trapped in a downtrend, casting doubts on the sustainability of its current momentum. Altcoin Sherpa points out a critical resistance level at approximately $19.50 that Solana must overcome to change its trajectory. The crypto analyst highlights a concerning pattern: Solana has been consistently forming lower highs since reaching its 2023 peak of $32.30 back in July. This pattern suggests that each attempted rally has been met with increasing selling pressure, raising questions about the strength of the recent recovery. Related Reading: Dogecoin Price Outlook: Could We See A 10% Dip Due To Supply Pressure? Altcoin Sherpa advises caution for those considering entering the market, stating: “It’s nice to see some recovery, but every rally in the last few weeks has resulted in just a lower high. Regardless, if you’re in it for an investment, it can’t be bad to accumulate sub-$20.” Currently, Solana is trading at $19.12, according to CoinGecko, showing a modest 1.1% gain in the last 24 hours and a seven-day rally of 4.5%. Solana Support Hinges On FTX Liquidation In the event that SOL’s latest rally loses steam, Altcoin Sherpa identifies the $14 level as a potential support zone. However, he underscores a crucial factor that could influence Solana’s fate in the short term—the imminent liquidation of a massive Solana stash held by the troubled crypto exchange FTX, amounting to a staggering $1.16 billion. The outcome of this liquidation could significantly impact Solana’s price stability. SOL market cap currently at $8.08 billion. Chart: Supporting Altcoin Sherpa’s bearish outlook is an analysis of key technical indicators. The Relative Strength Index (RSI) is indicating a decline in momentum, hinting at a potential downturn for Solana. Furthermore, the Awesome Oscillator (AO) has ventured into the negative territory, providing additional validation for the bearish sentiment. Related Reading: Toncoin Shatters Bearish Predictions With 40% Rally – What’s The Story? If selling pressure continues to intensify, Solana’s price could test the psychological level of $18.00, hovering around the midline of its current trading channel. In a more dire scenario, SOL could plunge even further to reach the lower boundary of the channel at $17.29. The quantity of long positions that have already been liquidated is 45 times that of short positions, according to the liquidation statistics provided by CoinGlass. Source: Coinglass Potential Turning Point However, there is a glimmer of hope for Solana investors. In the worst-case scenario, if the downtrend persists, Solana’s price could eventually find support in the demand zone, marked by the last candlestick before the remarkable July uptrend began. This area tends to attract buyers and might serve as a potential turning point for SOL’s fortunes. While Solana’s recent rally has generated excitement, caution is advised, as technical indicators and market dynamics point towards a possible continuation of the downtrend. The crypto world remains as unpredictable as ever, and investors should carefully consider their options before diving in. (This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk). Featured image from Adobe Stock

Read the Disclaimer : All content provided herein our website, hyperlinked sites, associated applications, forums, blogs, social media accounts and other platforms (“Site”) is for your general information only, procured from third party sources. We make no warranties of any kind in relation to our content, including but not limited to accuracy and updatedness. No part of the content that we provide constitutes financial advice, legal advice or any other form of advice meant for your specific reliance for any purpose. Any use or reliance on our content is solely at your own risk and discretion. You should conduct your own research, review, analyse and verify our content before relying on them. Trading is a highly risky activity that can lead to major losses, please therefore consult your financial advisor before making any decision. No content on our Site is meant to be a solicitation or offer.