Solana price needs to recover recent losses or SOL will crash 35%
- Solana price dug deep inside the $115.51 to $144.70 demand zone after the January 20 flash crash.
- Despite the recent sell-off, SOL can alleviate the bearish outlook by recovering above $135.71.
- A swing low below $115.51 will create a lower low, triggering a 35% crash to $78.76.
Solana price experienced a crash on January 20, slicing through two crucial barriers. However, SOL has not created a lower low from a high time frame perspective, suggesting that buyers are preventing a further decline.
Solana price at make or break point
Solana price crashed 16% in 24 hours, causing it to slice through the 200-day Simple Moving Average (SMA) at $140.54 and the weekly support level at $135.71. Interestingly, this development was cushioned by the bullish momentum since the crash occurred inside a daily demand zone that extends from $115.51 to $144.70.
A breakdown of the said demand zone to create a daily candlestick close below $115.51 will create a lower low from a high time frame perspective, indicating that the price wants to head lower. However, Solana price is currently inside this demand zone and has a chance to recover.
A daily candlestick close above the weekly support level at $135.71 and preferably above the 200-day SMA at $140.54 will indicate a resurgence of buyers and indicate that SOL could retest the 50-day SMA coinciding with the daily supply zone, extending from $169.79 to $179.19, constituting a 33% advance.
SOL/USDT 1-day chart
On the other hand, if Solana price produces a daily candlestick close below $115.51 it will create a lower low, invalidating the bullish thesis. This development will suggest that a bearish outlook is in play and open the path for a 35% crash to the next daily demand zone that stretches from $65.91 to $78.76.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
