Here’s why you shouldn’t buy Solana yet, according to analyst 
Cryptocurrency Jul 6, 2024 Share
Solana (SOL) has experienced a significant price drop of over 15% in the last 48 hours, reaching a low of $121 on July 1. SOL’s weekly losses stand at around 3%, and the 30-day timeframe shows a decline of approximately 19%.
Despite this downturn and a brief recovery over the past 24 hours, trading expert Alan Santana projected on TradingView that amid the bearish sentiment, it is not yet the time to buy Solana due to several concerning market indicators and technical analysis.
According to the analyst, since March 2024, Solana’s market has been consolidating with a bearish bias, indicating a market in a state of indecision.
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This consolidation reflects that neither buyers nor sellers can establish a dominant trend, with the bearish bias suggesting a prevailing downward momentum.
Solana price analysis chart. Source: Alan Santana / TradingView
Solana recently experienced a strong bearish move, the most significant since April 2024, underscoring the bearish outlook and indicating a surge in selling pressure.
The break of the descending triangle support level is a critical bearish signal. This pattern, typically seen as a bearish continuation pattern, suggests that the previous support could not hold, leading to further downside potential.
Increased selling pressure and key levels to watch
The intensification of bearish action implies increased selling pressure, which usually signifies that the downtrend will continue.
Analysts recommend considering the weekly timeframe to get a broader perspective, as a strong bearish move often needs time to settle, which could span weeks or even months.
Key levels to watch: Fibonacci retracement levels
Fibonacci retracement levels provide insight into potential support and resistance levels based on historical price movements. According to the chart, the key levels to watch are:
- 0.618 Fibonacci Level: $88.36 – This level is a significant Fibonacci retracement level that often acts as strong support. A drop to this level would indicate a substantial correction from current prices.
- 0.786 Fibonacci Level: $55.26 – This deeper retracement level could be another critical support level. If the price reaches this level, it might present a more favorable buying opportunity.
Solana price analysis
At press time, Solana is trading at $139. Solana is currently experiencing a strong bullish trend in the cryptocurrency market.
Solana 7-day price chart. Source: Finbold
According to DeFiLlama, the Total Value Locked (TVL) in Solana has reached a remarkable $4 billion, signaling robust growth and increased investor confidence.
However, increasing bearish dynamics could force Solana to regress, seeking support at the $130 level. A further drop might bring it down to the $120 support zone and potentially to $88.36 and $55.26, reflecting a shift to a bearish market outlook.
Although there are signs of a potential bullish trend, the market has been exhibiting clear bearish signals, and buying now could result in possible losses. Investors should closely monitor the market and stay informed about any changes in the technical indicators that could signal a shift in the current trend.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
