Aaryamann Shrivastava
FXStreet
- Solana price noted a decline in value as the altcoin fell from $24 to trade at $21 at the time of writing.
- Solana price still needs to register a 70% rally in order to reclaim its pre-November crash levels of $36.9.
- A recovery above $28 will invalidate the bearish thesis if corrections do not dominate the price action.
Solana price has managed to exceed expectations with its rally over the last couple of days, but the Ethereum killer is now facing the possibility of corrections. This cool-down, following an extensive rally, could lead to the price losing its critical support, which may not be in the traders’ best interest.
Solana price faces the fear of losing its uptrend
Solana price, which managed to chart an increase of 151.82% in the span of three weeks, declined by more than 14.27% in the last five days. The trading price of SOL fell from $23.43 to $21.07, losing its immediate support at $22.77.
The Ethereum killer is now nearing the verge of a further decline as the Parabolic Stop and Reverse (SAR) indicator is highlighting an active downtrend. The presence of the indicator’s blue dots above the candlestick is evidence of the same, suggesting a decline in price could be on the cards.
In such a case, traders might need to watch certain levels to minimize their losses should SOL fall further. Solana price is currently hovering above the support level at $19.30. The lost of this support would push the price to tag the critical support at $17.89. If the altcoin falls below this level, it could end up slipping toward $15.90, marking a 22% crash.
SOL/USD 8-hour chart
However, there is a solid possibility of this being simply a cool down from the aforementioned 151% rally, and Solana price could end up bouncing off of the uptrend line and breach the immediate resistance at $22.77.
This would place Solana price on the path of a further rise as reclaiming $22.77 as a support floor would give SOL the boost it needs to rally to $28.28. A daily candlestick close above this critical resistance would invalidate the bearish thesis and set the cryptocurrency on the path of further recovery.
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