Solana (SOL) Loses Momentum, It Will Only Get Worse
Solana’s (SOL) recent surge above the short-term resistance level was short-lived, indicating a potential early update of the lows for the cryptocurrency.
A recent report by BeInCrypto shed light on the fact that the Solana network’s developers encountered a technical glitch on February 26 that caused disruptions in transactions on the main network.
This disruption halted the functioning of Solana for an entire day, and despite efforts by the developers, the root cause of the issue remains unknown.
Solana fails bullish breakout
According to the technical analysis report, it is evident that the Solana price has been showing a downward trend, following a descending resistance line since August 2022.
The most recent interaction with this line was on February 20 (represented by a red icon). Since then, the value of the token has been declining and is now approaching the $20 support level, which has been visible on the chart since January 14th.
In addition, the daily RSI has recently fallen below 50, indicating a bearish trend. If the market breaks below the $21.50 support level, it could lead to a further drop, reaching the closest Fib retracement level at $17.50.
However, a break above the descending resistance line would change this bearish outlook and could potentially target Solana to reach the next resistance level at $36.
Source: TradingView SOL peeks above range highs
SOL peeks above range highs
Looking at the 6-hour chart, the current outlook for Solana seems bleak. Although the price initially rose above the $26 resistance area (represented by a red icon), it quickly retraced back.
This price rejection occurred simultaneously with Solana’s bounce off the descending resistance line, which often results in significant exchange rate drawdowns.
This could potentially lead to a breakdown of the nearest support area of $21.50, causing the token to drop to the Fibo level of 0.5, marking the lowest point since the beginning of January.
However, if the price manages to break through the $26 area, which also coincides with the descending resistance line, this would cancel out the current bearish scenario and signal a bullish trend.
Source: Trading View
Based on the analysis, the most probable prediction for Solana’s rate is a decline towards the Fibo level of 0.5 correction, which is estimated to be around $17.60.
After this correction, the price may begin to recover. However, if the price manages to break the long-term descending resistance line in a bullish direction, this would invalidate the current bearish outlook and potentially push the price higher, possibly even up to $37.