Solana Price Drops 3.72% To $21

Solana Price Drops 3.72% To $21 – What Next SOL?

Updated: 03 March 2023

Disclosure

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

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Solana price was trading below major moving averages (MAs) just above $21 after dropping 3.72% in the past 24 hours. The buyers were struggling to hold on to a key support level as the technical setup revealed that SOL was at risk of further losses to $15. Read more to find out why this is the case.

Solana Price Needs To Hold Above $20.8 To Avoid Tanking Further

SOL successfully completed a V-shaped recovery pattern on February 20, but profit-taking on the rally to $27 saw the altcoin embark on a downtrend. Since then, the smart contracts token has recorded a series of lower highs and lower lows leading to the appearance of a descending parallel channel on the four-hour chart (see below).

Descending channels are highly bearish chart patterns that project continued price drops as long as the asset continues to trade within the confines of the technical formation. A breakout on the downside is confirmed once the price slips below the lower boundary of the channel.

For Solana’s case, a four-hour candlestick slide below the middle boundary of the channel at $20.82 would see the bulls retreat to revisit the V-shape’s swing low at $19.70, embraced by the lower boundary of the falling channel.

Losing this support would spell doom for the price placing it on a free fall to the supplier congestion zone above $15. This would represent a 27.61% decline from the current price.

SOL/USD Four-hour Chart

Solana Price Chart - Mar 3 — TradingView Chart: SOL/USD

Solana’s gloomy outlook was validated by the downward movement of the Moving Average Convergence Divergence (MACD) indicator. The position of this trend-following indicator below the zero line in the negative region suggested that SOL’s market was still bearish. Note that the call to sell Solana that was sent on Thursday when the MACD line (blue) crossed below the signal line (orange) was still in play, adding credence to the bullish narrative.

In addition, the Relative Strength Index (RSI) was positioned in the negative region. The price strength at 36 reinforced the bears’ grip on the Solana price.

Moreover, even though the bulls were able to push the price from the current levels, they would be met by stiff resistance on the upside. Note that FTM traded below key support areas including the 50 Simple Moving Average (SMA) at $22.69 and the $23 supplier congestion zone where both the 100-day and 200-day SMAs appeared to converge.

A decisive close above these SMAs would invalidate the bearish thesis with the next logical move being the $25 psychological level or a return to the $27.12 range highs.

Promising Alternatives To Solana

The technical setup showed that the “Ethereum-killer” was on the brink of an extended correction to $15 if the current recovery is not sustained. In the meantime, traders could consider FGHT, the native token of the Fight Out ecosystem, which has been performing well in presale.

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