Solana
Solana Nears Crucial Support at $128: Will the Bulls Hold the Course?
- SOL is heading towards a critical support level.
- If the bulls fail to defend this level, the coin price will fall below $115.
Solana [SOL] closed at a 30-day high of $186.70 on May 20. As profit taking increased, the price of the coin fell, forming a descending triangle.
At press time, SOL was trading at $132.23, having fallen nearly 30% in the past month, according to CoinMarketCap.
Solana bulls need to lock down
When the price of an asset forms a descending triangle, it is a bearish sign which confirms the strong selling pressure on its market. This trend forms when the price of an asset makes lower highs and bounces off a horizontal support level.
SOL found support at $128.49. This level of support is very important. Generally, when a descending triangle forms and the bulls fail to defend the price when it touches the horizontal support line, it signifies a bearish breakout and continuation of the downtrend.
This means that sellers have dominated buyers and the price of the asset will continue to fall.
An assessment of some of Solana’s key indicators confirmed the possibility of this happening. For example, its Relative Strength Index (RSI) and Money Flow Index (MFI) were 33.17 and 29.95, respectively, at press time.
These indicators measure the oversold and overbought conditions of an asset by tracking its price changes. They range from 0 to 100, with values above 70 signaling that the asset is overbought and due for a correction, while values below 30 suggest that the asset is oversold and could see a rebound .
At their current values, SOL’s RSI and MFI suggest that demand for the altcoin among market participants was low. Indicators indicated that selling pressure was higher than buying activity in the SOL market.
Additionally, the coin’s Moving Average Convergence/Divergence (MACD) readings confirmed traders’ preference for selling their SOL holdings. At press time, the coin’s MACD line (blue) was below its signal (orange) and zero lines.
Source: TradingView
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When an asset’s MACD is set up this way, it is a bearish signal. Traders often interpret it as a sign to go long and take short positions.
If SOL price falls to support and the bulls fail to defend it, its value will drop further to $113.943. However, if market sentiment changes and demand for SOL increases, the coin’s price could surge as high as $142.45.
Source: TradingView