- Solana price hovers around $64 after the recent crash to re-establish the directional bias.
- The support confluence containing a declining support trend line and bullish divergence hints at a 20% recovery rally to $77.
- A failure to close above $66 could trigger a 32% crash to $44.
Solana price has been on a massive downtrend on the high time frame chart. This trend was exacerbated after the Bitcoin price crashed, taking the crypto markets with it. Amid this bearish outlook, SOL shows signs of a potential recovery rally as it tags a significant support confluence.
Solana price at crossroads
Solana price has witnessed three major sell-offs since its all-time high at $261 on November 6, 2021. The first one was on December 3, 2021, when SOL crashed 38% from $239 to $147. Following this was, perhaps, the most brutal crash that pushed the Layer 1 token by 60% from $205 to $80.
The third and most definitely not the last crash was between April 1 and May 10, during which, Solana price nosedived roughly 58% to where it currently stands - $64.
Interestingly, the trend line drawn along the swing lows since September 19 has served as a support level, allowing Solana price a respite amid the crashes. The first bounce pushed SOL to a new all-time high after a 95% rally.
The second and the third bounces were on January 22 and March 14, when Solana price rallied 36% and 84%, respectively. Therefore, the most recent retest could trigger a minor recovery rally for SOL.
Adding credence to this outlook is the divergence between the price’s lower lows since January 22 while the Relative Strength Index (RSI) has formed higher lows. This setup is known as bullish divergence and often resolves in a way that pushes the underlying asset to the upside.
Therefore, investors can expect Solana price to rally at least 20% and retest the $77 hurdle while the sellers are exhausted.
SOL/USDT 3-day chart
While the recovery narrative makes sense from a technical standpoint, investors need to pay attention to the overall trend, which is bearish. Adding more woes to bulls is the fair value gap aka the price inefficiency, extending from $60 to $44.
A failure to quickly recovery above the range low at $66 will indicate weakness among buyers. In such a case Solana price could crash 30% and retest $44.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
IRS says crypto staking should be taxed in response to lawsuit
The IRS stated that rewards from cryptocurrency staking are taxable upon receipt, according to a Bloomberg report on Monday, which stated the agency rejected a legal argument that sought to delay taxation until such rewards are sold or exchanged.
Solana dominates Bitcoin, Ethereum in price performance and trading volume: Glassnode
Solana is up 6% on Monday following a Glassnode report indicating that SOL has seen more capital increase than Bitcoin and Ethereum. Despite the large gains suggesting a relatively heated market, SOL could still stretch its growth before establishing a top for the cycle.
Ethereum Price Forecast: ETH risks a decline to $3,000 as investors realize increased profits and losses
Ethereum is up 4% on Monday despite increased selling pressure across long-term and short-term holders in the past two days. If whales fail to maintain their recent buy-the-dip attitude, ETH risks a decline below $3,000.
Crypto Today: BTC hits new Trump-era low as Chainlink, HBAR and AAVE lead market recovery
The global cryptocurrency market cap shrank by $500 billion after the Federal Reserve's hawkish statements on December 17. Amid the market crash, Bitcoin price declined 7.2% last week, recording its first weekly timeframe loss since Donald Trump’s re-election.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot ETFs in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.