Solana Shows Strong Performance, Gains 5% in 24 Hours
Solana has seen a positive movement in the past 24 hours, with the SOL price trading close to $20 and gaining nearly 5%. This increase has contributed to the coin’s weekly gains of 10%.
On the daily chart, Solana displayed a bearish market structure that became evident when it fell below the recent higher low of $22.73 on August 5. This led to a significant downward move in mid-August, resulting in a 23.8% decline over eight days.
Examining the Market Structure and Potential Buying Opportunities
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The Fibonacci retracement levels indicate that the 61.8% level is at $20.18. The downtrend and market structure remain intact as the Relative Strength Index (RSI) stays below the neutral 50, emphasizing bearish momentum. It is crucial for bulls to hold the line at the 78.6% retracement level, priced at $16.94.
If this level is tested, it could present a buying opportunity. Potential targets for buyers include local highs at $25.5, $29, and an ambitious target of $32.
Cautious Outlook and Impending Liquidation
Despite recent gains, popular crypto strategist Altcoin Sherpa advises caution when considering entering Solana. They note that every rally in the past few weeks has resulted in a lower high but suggest accumulating sub-$20 for long-term investment purposes.
Altcoin Sherpa identifies the $14 level as a potential support zone for Solana. However, there is an important factor that may impact Solana’s trajectory in the short term - FTX’s impending liquidation of a substantial Solana reserve worth $1.16 billion. The outcome of this process could significantly affect Solana’s price stability.
Hot Take: Solana’s Future and Discounted Price
It remains to be seen how Solana will progress from here. Despite recent gains, the SOL price is still trading at a 90% discount from its all-time high in 2021. Investors and traders should keep an eye on market developments and the impact of FTX’s liquidation on Solana’s price.
