In the cryptocurrency market, technical analysis is an essential indicator, especially for investors trading in the futures market. So, what clues does technical analysis provide for Solana, which was trading at $73.82 at the time the article was written? We examine this with a detailed chart analysis and key support and resistance levels.
Noteworthy Prediction for SOL
As of December 19th, SOL is trading around $73.82, approximately a 50% increase from its $51 level a month ago. However, the rally on the SOL front seems to lack the momentum needed to sustain the uptrend. In particular, the cryptocurrency’s Relative Strength Index (RSI) on the three-day chart has fallen from 90 to 73, continuing to create lower peaks against higher price peaks.
A similar declining trend can be observed between the rising SOL price and the decreasing three-day trading volumes. This could be an early warning sign that the current bullish trend is losing strength and raises questions about the possibility of a trend reversal.
Recently, the SOL price has stabilized at the $73 level, which intersects with the 0.236 Fibonacci level that served as support in the first quarter of 2022. Therefore, if SOL follows the signals of a bearish divergence towards the target price, it could lead to a 40% decline towards the 50-3D Exponential Moving Average (EMA; red wave) near $42 by January 2024.
Downtrend in Solana Could Create Buying Opportunity
In response to these claims, analyst Cold Blooded Shiller stated that a downward deviation in Solana’s price, if followed by sales, could create a buying opportunity. Shiller commented:
“These really show that we have a greater chance of reaching cheaper prices to buy, not that it’s the macro crypto peak. Trends are still upward, and we still want to buy; we don’t care much about the short side, and we’re getting some signs that we might be lucky to reach cheaper assets in the market.”
In other words, the Solana price trend could hover around the 50-3D EMA and could be followed by a recovery in the first quarter of 2024. The weekly chart of Solana also presents a similar outlook.
