Can Solana (SOL) Price Reclaim $27, or Is Further Downside Expected?

The Solana (SOL) price has fallen since reaching a new yearly high in July. It now trades considerably below the $27 horizontal resistance area.

The reaction to the $27 area will be crucial in determining if the future trend is bullish or bearish.

Solana Price Resumes Descent After Rejection

The weekly time frame technical analysis shows that the SOL price broke out from a long-term descending resistance line in July. The line had previously been in place for 609 days, tracing the downward movement since the all-time high in November 2022.

The SOL price failed to clear the $27 horizontal area despite breaking out. This created a long upper wick and validated the area as resistance. So, the bullish trend reversal will not be confirmed until the SOL price closes above this area.

Transform your crypto game with predictive insights. Visit now.

The weekly RSI is leaning bullish and does not confirm the possibility of a bullish trend reversal. Traders utilize the RSI as a momentum indicator to assess whether a market is overbought or oversold and to determine whether to accumulate or sell an asset.

SOL/USDT Weekly Chart. Source: TradingView

If the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true. While the RSI sits above 50 (red circle), it has yet to bounce above the line. Therefore, the possibility remains that it will decrease below it soon.

A decisive RSI bounce and price close above $27 will be required for the trend to be confirmed as bullish.

Solana Network news is mixed. Solana’s Saga Mobile slashed its web3 smartphone prices by 40%, aiming for increased adoption. However, Solana’s Cypher protocol suffered a $1 million exploit on Monday.

Read More: Crypto Signals: What Are They and How to Use Them

SOL Price Prediction: Initial Retracement Expected

While the technical analysis on the weekly timeframe is neutral, the daily trend is leaning bearish.

The main factor contributing to this pessimistic sentiment is the deviation that has caused the price to drop below the $27 resistance level (red circle). Market analysts consider this type of deviation as bearish and often predict it to foreshadow a significant price decrease. It signifies that the prior breakout was likely, not legitimate.

After this deviation, the SOL price underwent a decline to a low of $22.23 before bouncing to $24. But, the price still trades below the $27 area.

On the daily timeframe, the RSI is undetermined. The indicator is moving above and below 50 (red circle), indicating an undetermined trend.

Should the downward trajectory persist, the most likely support will be at $16, created by a long-term ascending support line. From the current price, a drop to it will be a decrease of 36%.

However, if the SOL price experiences a bounce-back, analysts anticipate a return to the $27 resistance level.

Solana (SOL) Price Prediction
SOL/USDT Daily Chart. Source: TradingView

Despite this bearish SOL price prediction, a breakout above $27 will mean that the correction is over and an upward movement has begun. In that case, the SOL price can increase by nearly 90% and reach the $46 resistance area.

Read More: Top 11 Crypto Communities To Join in 2023

For BeInCrypto’s latest crypto market analysis, click here

The post Can Solana (SOL) Price Reclaim $27, or Is Further Downside Expected? appeared first on BeInCrypto.

Source link

Be the first to comment

Leave a Reply

Your email address will not be published.