NEW DELHI (CoinChapter.com) — Solana (SOL) is signaling a major breakdown. It could decline toward $72 or even $60 before the bulls attempt a fresh increase.
Solana Price (SOL) Takes Hit
After a sustained upward move, the SOL price faced strong resistance near the $126 zone. A new multi-week high was formed at $126.66 before the price started a downside correction. In the past couple of analyses, we discussed the importance of the $90 support zone.
However, Solana failed a crucial test and extended its decline below the main $90 and $88 support levels. There was a close below the 23.6% Fib retracement level of the main increase from the $17.75 swing low to the $126.66 high.
On the daily chart, SOL broke a major bullish trend line with support at $90.00. More importantly, the bears succeeded in a daily close below the 50-day simple moving average (blue). The recent drop in Bitcoin and Ethereum also accelerated Solana and other cryptocurrencies’ losses. Many reports show FTX sold about $1 billion of Grayscale’s spot BTC.
These are worrying signs for the bulls in the near term. The current price action suggests a high chance of more downsides below the $80 level. The first major support is visible near the $72.50 level. There could be heavy losses if the bulls fail to protect the $72 support.
The main uptrend support is now forming near the $60 zone (a multi-touch region). It is close to the 61.8% Fib retracement level of the main increase from the $17.75 swing low to the $126.66 high. Therefore, Solana bulls might take a strong stand near $60. Any more losses might send the SOL price toward the $45 support.
Key Levels To Watch
Conversely, Solana might find bids near $72 or $60. The price might start an accumulation phase above the stated levels before a fresh increase. Immediate resistance is visible on the daily chart at $90 and the 50-day simple moving average (blue) (the recent breakdown zone).
The next key resistance sits at the $100 handle. A successful daily close above the $90 and $100 levels could set the stage for a fresh increase. In this case, SOL could revisit the $125 zone.
Overall, the SOL price is signaling a major breakdown below $90. It might continue moving toward the $72 region or $60 before the bulls take a stand and aim for a fresh increase.
