The Solana (SOL) price is testing key support levels
On the weekly timeframe, SOL has dropped from its yearly high of $32.13 in July and is now approaching the $18 horizontal support area. This level has historically provided strong support, except for a brief deviation in June. The recent decline may have been influenced by FTX’s transfer of $10 million in Solana tokens to the Ethereum network.
Whether SOL breaks down or bounces from this support area will determine its future direction. A bounce could lead to a 50% increase to the $27 resistance area, while a breakdown could result in a 30% drop to $13.50. Additionally, a breakdown would confirm a descending resistance line that has been in place since the all-time high in 2021.
Mixed signals on the weekly timeframe
The weekly RSI is currently bearish, indicating uncertainty in the market trend. While the RSI is declining, it remains above the 50 mark, which suggests mixed sentiment among traders.
Potential bounce on the daily timeframe
On the daily timeframe, there are more positive signs for a potential bounce. The SOL price has bounced at a 256-day ascending support line multiple times this year, each time followed by significant upward movements. Additionally, SOL is trading inside a bullish descending wedge pattern and is close to breaking out above the wedge’s resistance line.
However, the daily RSI is currently below 50 and decreasing, which doesn’t support a breakout scenario.
Solana price prediction
The future direction of SOL will depend on whether it breaks out from the wedge pattern or breaks down from the ascending support line and $18 horizontal support area. A breakout could lead to a 50% increase, while a breakdown could result in a 30% drop.
Hot Take: Solana’s Price Hangs in the Balance
The Solana (SOL) price is at a critical juncture as it tests key support levels. While the weekly timeframe shows bearish signals, the daily timeframe offers hope for a potential bounce. Traders should closely monitor the $18 horizontal support area and the ascending support line for clues about SOL’s future direction. A breakout or breakdown from these levels could lead to significant price movements. The mixed signals from the RSI add further uncertainty to the market trend. Overall, SOL’s price hangs in the balance, and traders must stay vigilant to seize potential opportunities.
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