The price of Solana (SOL) had retraced over the past 24 hours to trade at the lower level of the Bollinger Bands (BBANDS) indicator at press time. Although this is generally seen as a potential buy signal by traders, other technical flags on SOL’s daily chart suggested that the altcoin’s price may continue to drop in the coming 24-48 hours.
Daily chart for SOL/USDT (Source: TradingView)
SOL’s price was resting on the lower level of the BBANDS indicator at press time, which may be seen as a buy opportunity by traders. However, a bearish technical flag that was triggered over the past 48 hours may invalidate this bullish thesis, resulting in a continued decline in the altcoin’s value over the coming few days.
In the last 2 days, the daily Moving Average Convergence Divergence (MACD) line crossed below the daily MACD Signal line. This signaled that SOL’s momentum had shifted in favor of sellers. Consequently, the cryptocurrency was at risk of retesting the next support level at $17 in the coming few days.
A break below this mark will put SOL’s price at risk of plummeting to the crucial support level at $12.75 in the following 2 weeks. On the other hand, a daily candle close above the 9-day EMA line at around $19.26 within the upcoming 48 hours may invalidate the bearish thesis.
In this scenario, SOL’s price may have the support needed to overcome the $25 mark in the next few days. Thereafter, a daily close above this threshold could set the altcoin up to continue its ascent toward $35 towards the end of this month.
Meanwhile, the cryptocurrency trader and analyst Benjamin Cowen predicted in a tweet yesterday that SOL’s price may continue to drop in the short term. In the post, he revealed that it is commonplace for altcoins, especially those that are experiencing their first bear market, to sweep their prior lows.
Of course people will seek out a narrative to explain why $SOL is going down, but sweeping the prior lows is a common pattern for alts to follow in their first real bear market. https://t.co/J35LJgDDX3
— Benjamin Cowen (@intocryptoverse) September 10, 2023
At press time, SOL still had some work to do to overcome the overwhelming sell pressure on its charts, however, as its price dropped a further 1.08% over the past day of trading. Subsequently, CoinMarketCap indicated that the altcoin was changing hands at $18.34. Notably, SOL’s weekly performance was deeply entrenched in the red zone as well, and stood at -6.98%.
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