Solana price technicals hint at 40% crash by New Year’s

    20 Dec 2023
    62 Views

    Solana’s SOL price risks losing nearly half its value in the coming weeks as a classic technical setup puts a potential 40% crash into play.

    Bearish divergence limits Solana’s upside prospects

    As of Dec. 19, SOL is trading at around $76.35, up around 50% compared to its local price low of around $51 a month ago.

    However, SOL’s rally lacked the momentum required to sustain the uptrend further. Notably, the cryptocurrency’s relative strength index (RSI) has dropped from 90 to around 73 on its three-day chart, forming lower highs versus the price’s higher highs.

    A similar bearish divergence can be spotted between SOL’s rising price and the declining three-day trading volumes. This is possibly an early warning sign about the current bullish trend losing strength, hinting at a trend reversal ahead.

    In recent days, SOL’s price has stabilized near $73, a level coinciding with its 0.236 Fibonacci retracement line, which served as support in Q1 2022.

    So, the bearish target price is a 40% drop toward its 50-3D exponential moving average (EMA; the red wave) near $42 by January 2024, if a correction does indeed follow SOL’s bearish divergence signals.

    SOL price bull market at risk?

    Solana’s bearish divergence is a buying opportunity if the selloff does happen, at least according to independent analyst Cold Blooded Shiller.

    “These are really just indications that there’s a stronger chance we’ll get cheaper prices to buy at, not that it’s some macro crypto top,” he noted, adding:

    “The trends are still up, we still want to buy, we don’t really care about the short side as much and we’re getting some signs that we may be fortunate to get some cheaper coins across the market.”

    In other words, the bearish sentiment in the Solana market may run its course around the 50-3D EMA, followed by a rebound sometime in Q1 2024. Solana’s weekly timeframe chart offers a similar outlook.

    Notably, Solana’s market corrections in the past have exhausted near an ascending trendline support. So, a move toward the trendline (around $40) could reignite bullish sentiment. Traders are also likely to buy SOL near the 0.786 Fib line near $55, a resistance-turned-support level.

    SOL’s price must crash below these two support levels to confirm a bearish trend reversal. If it doesn’t, then the price may rise toward $100 in early 2024.

    Source: https://cointelegraph.com/news/solana-price-technicals-40-crash-new-year-s

    Leave a Reply

    Your email address will not be published. Required fields are marked *