Solana’s Recent Surge Raises Doubts about Sustainability
Solana (SOL) has experienced a significant price surge lately, but one crypto strategist believes that this upward momentum may not last. Altcoin Sherpa argues that despite last week’s rally, Solana is still stuck in a downtrend, casting doubt on the sustainability of its current price movement.
Altcoin Sherpa points out a critical resistance level at around $19.50 that Solana needs to overcome in order to change its trajectory. The analyst also highlights a concerning pattern: Solana has been forming lower highs consistently since reaching its peak of $32.30 in July. This pattern suggests that each attempted rally has been met with increasing selling pressure, raising questions about the strength of the recent recovery.
“It’s nice to see some recovery, but every rally in the last few weeks has resulted in just a lower high. Regardless, if you’re in it for an investment, it can’t be bad to accumulate sub-$20.”
Currently, Solana is trading at $19.12, showing a modest 1.1% gain in the last 24 hours and a seven-day rally of 4.5%.
Solana Support Hinges On FTX Liquidation
If SOL’s latest rally loses momentum, Altcoin Sherpa identifies the $14 level as a potential support zone. However, there is an important factor that could affect Solana’s fate—the imminent liquidation of a massive Solana stash held by troubled crypto exchange FTX, totaling $1.16 billion. The outcome of this liquidation could significantly impact Solana’s price stability.
Potential Turning Point
In the worst-case scenario where the downtrend continues, Solana’s price could eventually find support in the demand zone, marked by the last candlestick before the significant July uptrend began. This area tends to attract buyers and might serve as a potential turning point for SOL’s fortunes.
While Solana’s recent rally is exciting, it’s important to exercise caution. Technical indicators and market dynamics suggest a possible continuation of the downtrend. The crypto market remains unpredictable, so investors should carefully consider their options before getting involved.
Hot Take: Solana’s Rally May Be Short-Lived
Despite a recent surge in price, there are doubts about the sustainability of Solana’s momentum. Altcoin Sherpa warns that Solana is still trapped in a downtrend, with lower highs forming consistently. Overcoming a critical resistance level at $19.50 is crucial for changing Solana’s trajectory. Altcoin Sherpa advises caution for those considering entering the market, but accumulating sub-$20 could be beneficial for long-term investments. The imminent liquidation of a massive Solana stash held by FTX could influence short-term price stability. However, there is hope that Solana’s price could find support in the demand zone if the downtrend continues. Despite excitement around Solana’s rally, it is important to be cautious due to technical indicators and market dynamics pointing towards a possible continuation of the downtrend.
Newt Bettec emerges as an intellectual voyager at the intersection of crypto analysis, meticulous research, and editorial mastery. Within the digital labyrinth of cryptocurrencies, Newt’s intellect traverses intricate corridors, resonating with seekers of diverse inclinations. His talent for unraveling complex threads of crypto intricacies seamlessly blends with his editorial finesse, transmuting intricacy into an engaging tapestry of understanding.