- Solana price produced a sell signal on January 19, resulting in a 13% crash.
- Investors can expect this correction to continue, resulting in another 17% drop.
- A daily candlestick close above $23.38 that flips it into a support floor will invalidate the bearish thesis.
Solana price shows a clear shift in the market structure after forming a local top at a crucial hurdle. This development has a chance of sliding lower and triggering a steep correction for SOL holders.
Solana price cracks under pressure
Solana price tripled between December 29, 2022, and January 16, 2023, as it rallied 212% in less than three weeks. This explosive rally hit $23.38, which is the midpoint of the 79% crash that occurred between November 5, and December 29, 2022.
This mean-reversion play pushed Solana price to produce a daily candlestick close above the $23.38 hurdle but failed to flip it into a support floor, revealing the first sign of exhaustion. Additionally, SOL lost 9% of its market value on January 18, which produced a shift in the market structure favoring the bears.
As Solana price pushes higher in a pullback, it is likely to get rejected at $22.70, resulting in a continuation of the downtrend. At the same time, the Relative Strength Index (RSI) has also slid below the overbought zone at 70.
A continuation of the selling pressure from investors booking profits could send Solana price to retest the $17.66 support level and allow the RSI to retest at 50. This move would constitute a 17% loss for SOL from the current position.
SOL/USDT 1-day chart
On the other hand, if Solana price produces a daily candlestick close above 50% Fibonacci retracement level at $23.38 and flips it into a support floor, it will invalidate the bearish thesis. In such a case, SOL could target the 62% retracement level at $27.08 or the 70.5% retracement level at $29.70 as targets for the near term.
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
XRP ruling by Judge Torres denied in Coinbase lawsuit, yet another blow to Ripple
XRP programmatic sales ruling by Judge Torres completely rejected by US Court in Coinbase lawsuit. US Court rejected Coinbase’ motion to dismiss SEC lawsuit, weighing heavily on Ripple’s legal battle.
Sushi price eyes $3 after clearing key weekly resistance level
Sushi price flips the $1.628 resistance level into a support floor after a month of struggle. A temporary retracement might be a good opportunity to accumulate SUSHI before a retest of $3. A breakdown of the $1.267 barrier would invalidate the bullish thesis.
Bitcoin Price Outlook: Will $150 billion bank Morgan Stanley send BTC to new ATH?
Bitcoin has recorded increased volatility this week, with most of BTC holders currently in profit. As market activity continues to grow with long-term holders now ramping up on distribution pressure, the pioneer crypto is bearing the brunt of growing overhead pressure.
Coinbase loses first round of battle against SEC
A day after the SEC filed a lawsuit against Binance last year, it went after Coinbase in a sign that the clampdown is extending to key players in the industry. The latest development in the matter is that the court has ruled in favor of the financial regulator, which means the case will continue.
Bitcoin: BTC may have recovered, but is it out of the woods?
Bitcoin’s (BTC) upward momentum has shown a significant decline for the past two weeks or so. This development led to a bearish signal on the weekly and an uncertain outlook on the monthly.