- Solana price crashed roughly 17% from its opening price on September 7 but recovered quickly.
- A continuation of the uptrend will push SOL to retest the all-time high at $195.42.
- If bears produce a lower low below $139.14, it will invalidate the bullish thesis.
Solana price stays strong despite the market crash on September 7 that wiped billions of dollars out of long positions. SOL is already scaling higher, hoping to retest the all-time high, but things could head south if BTC experiences another similar crash.
Market crash wipes out billions of dollars
On September 6, many altcoins experienced a sudden sell-off that recovered quickly. However, the daily candlestick close for this day was red. The next day, BTC dropped roughly 19%, ETH crashed 23%, and other altcoins dropped 40% or more.
This sell-off punished investors who jumped on the bandwagon late and can be visualized by the liquidation chart, which shows roughly $2.44 billion worth of long positions hit the dust. Moreover, $336 million worth of short positions also hit a dead end due to the sudden reversal of the uptrend.
While this sell-off is relatively much less painful than May 19, where more than $5 billion worth of longs were wiped. Regardless, Solana price seemed to not care about the drop as it recovered the 16% downswing on a daily time frame and closed on a positive note.
Moreover, the current daily candlestick is also green and shows signs of continuing the uptrend which falls perfectly in line with the institutional demand. A recent report from CoinShares noted that Solana stood next to Ethereum with a $13.2 million weekly inflow for September. This massive demand notes a doubling in SOL's total inflows year-to-date.
Solana price aims to retest all-time high
Solana price dropped roughly 16% lower than the September 7 opening price but recovered quickly from the losses, closing the day green. This quick recovery is a testament to investors’ interest in SOL.
If this buying pressure continues to persist, Solana price will likely continue to climb and retest the all-time high at $195.42. In some cases, SOL might tag the 162% Fibonacci extension level at $196.63 and set up a new all-time high.
However, if the bid orders continue to pile up, Solana price could advance higher, allowing a retest of the 127.2% Fibonacci extension level at $262.34.
SOL/USDT 1-day chart
While things are seemingly good in the Solana ecosystem, investors need to exercise caution due to the exponential run-up. The Relative Strength Index (RSI) has been sitting in the overbought zone since August 13 and shows no signs of slowing down yet.
If investors begin to book profit and buying pressure drops, SOL could drop 18% to the 70.5% Fibonacci retracement at $142. However, if the bears produce a decisive close below the $139.14, it will invalidate the bullish thesis by setting up a lower low.
This development could further trigger a downswing to the 50% Fibonacci retracement level at $113.74.
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.