- Solana price shows a lack of bullish momentum after rallying nearly 65% in the last month.
- Investors can expect SOL to drop 15% to 20%, depending on the bearish pressure.
- A daily candlestick close above $22.15 that flips it into a support floor will invalidate the bullish thesis.
Solana price has been on an uptrend for nearly a month, clocking in nearly 65% in gains. While the ascent is impressive, SOL holders need to be aware of a sudden shift in trend due to declining momentum. Additionally, the FTX bankruptcy case has new development that requires the now-defunct crypto exchange to pay up to $325 million to its European creditors.
Read more on FTX: FTX lawyers to claw back $323.5 million spent on FTX Europe acquisition, fueling hope of payback for creditors
Solana price ready to dive lower
Solana price kick-started its ascent on June 14 and set up a local top at $23.05 after rallying 65% in less than a month. This expansive move seems to be running on fumes now as sell signals emerge while SOL trades at $21.72.
The Wave Trend indicator has flashed a sell signal in the overbought region, suggesting that Solana price is due for a trend reversal. Additionally, the Relative Strength Index (RSI) and the Awesome Oscillator (AO) have also developed a bearish divergence, forecasting a bearish move in the near future.
A bearish divergence is when the asset produces higher highs as the momentum indicator sets up lower highs, suggesting a decline in bullish pressure. As a result, the setup resolves by triggering a correction for the underlying asset.
In the case of SOL, Solana price will first encounter the $19.66 support level after a 9.5% move. Following this, the altcoin will retest the midpoint of the 65% move at $18.51. This move would constitute a 15% downswing.
If bears are still in control and bulls fail to make a comeback, Solana price could tag the next stable support floor at $17.19. This move would constitute a 20% loss for SOL holders from the current position.
SOL/USDT 12-hour chart
While the retracement outlook detailed above makes logical sense, investors need to keep a close eye on Bitcoin (BTC) price. A sudden spike in the pioneer crypto could trigger a rally for altcoins, including SOL.
In such a case, if Solana price produces a daily candlestick close above the $22.15 hurdle and flips it into a support floor, it will invalidate the bullish thesis. Such a development could attract sidelined buyers and push SOL higher.
In this scenario, market participants can expect Solana price to kick-start a 27% ascent and tag the $27.59 hurdle.
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
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
PEPE's on-chain metrics indicate potential rally after weeks of silence
PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.
Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Crypto community blasts Polkadot following report of treasury spending
Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.