Crypto Analyzer

Solana – Already down by 21%, but is another 10% drop coming up?

The price of Solana (SOL) has experienced a significant drop of 21% in recent days, falling below the $90-support zone. The bearish trend has been intensified by Bitcoin’s latest drop, which emboldened SOL bears. Amidst this decline, the market sentiment for SOL in the short term has been strongly bearish, further exacerbating the selling pressure.

Analyzing the 12-hour price chart for SOL, it’s evident that the market structure has been bearish since January 6. The bulls struggled to flip the structure bullishly, necessitating a session close above $108.15. Furthermore, the Relative Strength Index (RSI) has moved below the neutral 50 since January 18, signaling bearish momentum. The On-Balance Volume (OBV) has also decreased, indicating higher selling volume in recent days.

The Visible Range Volume Profile (VRVP) tool has highlighted the $71-$76 zone as a crucial support area, with the $77-$90 zone showing lower trading volume, indicative of potential rapid price movements in this region. Moving further south, the $56-$62 area has the most volume in the visible range, with the Point of Control residing at $57.8, signifying a critical support level based on the past 14 weeks of trading.

Moreover, data from Coinalyze.net shows that open interest has been declining since January 19, aligning with the rapid fall in SOL’s price, indicating that traders have chosen to stay on the sidelines amidst the downtrend. Additionally, the spot Cumulative Volume Delta (CVD) has trended south in the past four days, indicating increasing selling volume.

In conclusion, the price action and various indicators strongly suggest a potential further decline in Solana’s price, with the possibility of it falling towards the $70 level. However, it’s important to note that the information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

As always, it’s essential for investors and traders to conduct thorough research and seek professional financial advice before making any investment decisions.