Solana (SOL) recently experienced a significant rally, surging above the $65 resistance level against the US Dollar. However, the price is now undergoing a correction and there are speculations that it might even slide below the $50 support level. This article analyzes the current market situation and assesses the potential future movements of SOL.
In the past few days, Solana witnessed an impressive rally above the crucial $60 level. SOL gained bullish momentum, outperforming both Bitcoin and Ethereum. The price even reached a high point near $68.16 before experiencing a downside correction. It traded below $60 and tested $52, ultimately forming a low near $51.23. Currently, the price is consolidating within a range.
The 4-hour chart of the SOL/USD pair on Kraken shows a break below a short-term rising channel with support near $58.00. Additionally, SOL is now trading below $60 and the 100 simple moving average (4 hours). This indicates a bearish sentiment in the market.
On the upside, the immediate resistance lies near the $59.50 level, close to the 50% Fib retracement level of the downward move from the swing high to the low point. The first major resistance is located at the $60.00 level. Should the price manage to surpass these resistance levels, it may pave the way for a larger increase, with the next key resistance near $62.00 and a potential target of $68.50. However, if SOL fails to recover above the $60.00 resistance level, a further downward move is probable.
Scenario 1: Bearish
If the price continues to decline, the initial support on the downside is expected to be near the $55.00 level. However, the first major support lies near the $51.20 level. If the price breaks below this support, a test of the $50 level becomes likely. Should the price successfully close below the $50 support, it may further decline toward the $45 support level in the near term.
Scenario 2: Bullish
Should the price reverse its current downtrend and successfully break above the $60.00 resistance level, a bullish scenario would unfold. This might result in a push towards the next key resistance levels at $62.00 and $68.50, potentially even reaching the $72.00 level. However, for this bullish scenario to unfold, SOL needs to demonstrate significant upward momentum.
4-Hours MACD:
The Moving Average Convergence Divergence (MACD) for SOL/USD indicates a loss of bullish momentum as it enters the bearish zone.
4-Hours RSI:
The Relative Strength Index (RSI) for SOL/USD is currently below the 50 level, suggesting a bearish sentiment in the market.
Solana (SOL) experienced a remarkable rally, surpassing the $65 resistance level. However, the current correction suggests that the price might slide below the $50 support level. The technical analysis indicates potential bearish scenarios, with initial support levels near $55.00 and $51.20. On the other hand, if SOL manages to reverse its current downtrend and break above the $60.00 resistance level, a bullish scenario may unfold, leading the price towards higher resistance levels. Traders and investors should closely monitor the market and consider these various scenarios before making any significant trading decisions.