On Tuesday, the cryptocurrency market witnessed a significant rally after Bitcoin (BTC) corrected towards $60,000. Sudden sell-offs, including an 11% intraday loss in Solana, affected most of the top altcoins.
40% Drop in SOL
The falling prices in cryptocurrencies indicate a break in multi-month support, which could lead to a prolonged correction trend. In April, the Layer 1 cryptocurrency Solana experienced a sharp decline due to intensified market uncertainty around the Bitcoin Halving event. This trend reduced SOL‘s value from $204 to its current trading price of $122, marking a 40% loss.
Analysis of the daily chart could show a downtrend retesting a rising trend line that has been intact since late November 2023. The price of the altcoin has rebounded several times from this support, indicating an active accumulation by investors, a significant signal of an established rally during market corrections.
Critical Level in Solana
However, the correction trend still fluctuating above the 50% Fibonacci retracement level could indicate a healthy pullback allowing buyers to dominate. If the demand pressure on the indicated trend line is strong, it could prevent Solana’s price from breaking below this support, anticipating a renewed recovery.
Therefore, the suitability of the cryptocurrency above the support trend line will be a crucial factor for SOL holders and potential buyers in the coming weeks. Conversely, if the altcoin closes a daily candle below this dynamic support, leading sellers to a prolonged correction could be beneficial, potentially dropping the token to $98.5. Consequently, on Tuesday, Bitcoin’s price correction to $60,000 affected many altcoins, including Solana. Falling prices indicate a prolonged correction, and SOL’s price dropped 40% in April. Daily chart analysis shows SOL testing the trend line and active investor participation.
