The euphoric sentiment of October and early November has lengthy since evaporated. The early December drop within the crypto market noticed the value of Solana drop beneath the $200 mark, and since then the value established a shift in market construction to bearish. Repeated waves of promoting have introduced Solana costs to $90 on the time of writing, however the ache for late consumers holding on for expensive life may not finish but.
Except the broader market sentiment shifts, Solana could possibly be a dangerous asset to purchase. A current congestion concern did shake some traders’ religion, which the Solana cofounder Raj Gokal was quoted on the time to have stated the community was solely “barely slower for some time” and never “critically flawed”.
The Fibonacci retracement and extension traces (yellow) had been plotted primarily based on SOL’s drop from $204.75 to $130. The 61.8% extension degree has seen a short lived stall within the descent of SOL on the charts.
The candlewicks to $105.1 (white) signify a set of native highs that SOL must climb above to flip the market construction on decrease timeframes. Nonetheless, above this degree lies the 27.2% extension degree at $109.67, which coincided with an space of demand (higher cyan field).
For the reason that value all the time seeks liquidity, it was doable that SOL would check this $110 space and idiot some market contributors into shopping for, earlier than reversing again towards the $70 space in the hunt for demand (decrease cyan field).
The 12-hour RSI has been beneath impartial 50 in current weeks, which confirmed bearish momentum and the presence of a downtrend. It did present a slight bullish divergence prior to now few days, which noticed SOL bounce to the $105.1 mark earlier than receding. At press time, the RSI discovered some help at 30 and seemed to be climbing.
The Cumulative Delta Quantity indicator confirmed that promoting quantity has been robust within the month of December, and no divergence was seen between the CDV and the path of the value motion.
The Directional Motion Index additionally confirmed a powerful bearish development in progress as each the ADX (yellow) and the -DI (purple) had been above the 20 mark.
The value may climb increased, or it would drop towards the $70-$78 space after a interval of sideways buying and selling on the $90 mark. In both case, it appeared possible that one other leg down could possibly be in retailer for Solana. The hawkish Fed feedback not too long ago, coupled with shares and Bitcoin seeing robust promoting stress meant that the market situations weren’t favorable to bulls.