Technical analysis in the cryptocurrency market is a crucial indicator for investors, especially in the futures market. As of the writing of the article, Solana (SOL) is trading around $73.82, and a detailed examination of its charts, including key support and resistance levels, is provided to glean insights into its future movements.
On December 19th, SOL shows approximately a 50% increase from its $51 level a month ago, trading at around $73.82. However, the momentum necessary to sustain the rally seems lacking. The Relative Strength Index (RSI) on the three-day chart has decreased from 90 to 73, indicating a pattern of lower peaks against higher price levels, suggesting a potential weakening in the bullish trend.
The decreasing three-day trading volumes in conjunction with the rising price of SOL also suggest a similar downtrend, serving as an early warning sign for a possible reversal in the current bullish trend. This raises questions about the sustainability of the rally and the direction of the next trend.
Recently, SOL’s price has stabilized around $73, intersecting with the 0.236 Fibonacci level, which acted as support in the first quarter of 2022. If SOL follows the bearish divergence signals, it could lead to a 40% decline towards the 50-3D Exponential Moving Average (EMA), potentially reaching near $42 by January 2024.
Analyst Cold Blooded Shiller suggests that a downward deviation in Solana’s price could create a buying opportunity if sales occur. Shiller indicates that these signals may not point to a macro crypto peak but rather to an opportunity to buy at lower prices, as the trends are still upward. Furthermore, Solana’s weekly chart also depicts a similar outlook, with the possibility of a decline around the 50-3D EMA followed by a recovery in the first quarter of 2024.