Key Takeaways:
- Solana (SOL) weekend uptrend might not last.
- The daily chart paints a bearish picture.
- Higher time frame chart agrees, hinting at more losses for Solana bulls.
YEREVAN (CoinChapter.com) — Solana (SOL) prices crashed nearly 6% intraday to reach $53.50 on May 16.
SOL/USD daily chart
Additionally, the digital asset hinted at a possible bearish continuation, as the trading volumes declined despite the uptrend. The relative strength index (RSI) slightly recovered from the ‘oversold’ position below 30, albeit not exhibiting a bullish incentive.
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Meanwhile, the recent crypto bloodbath hit Solana particularly hard, as it lost over 80% of its value since topping up at $260 in Nov. 2021. As a result, the digital asset dipped to the lowest level since Aug. 2021. Moreover, the weekly chart also hinted at a bearish continuation ahead.
Solana’s (SOL) weekly chart bearish
Notably, it is difficult to make rigid predictions amid a turbulent market. However, Solana’s weekly chart technicals hinted that the digital asset could add another red candle to its seventh consecutive bearish week. In short, the crypto carnage resulted in a Death Cross between the 20 and 50-week exponential moving averages (EMA-20 and EMA-50).
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The bearish formation occurs whenever a short-term MA crosses below a long-term MA. Therefore, the Death Cross cannot be a cause for bearish continuation per se. However, the pattern rings a bearish bell for traders and could trigger a sell-off wave.
Additionally, the trend-based oscillators on the weekly chart: MACD and RSI, were not skewed by the weekend uptrend. Instead, MACD continuously showed a downtrend since Q4 2021, and the RSI crept sideways below the 50-margin, indicating low return expectations from traders.
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Notably, any altcoin bias greatly depends on Bitcoin price and the broader fiat economy in the current market turmoil. The ongoing war, the increased interest rates after troubling CPI reports, and the recent crypto bloodbath did a number on Solana. Thus, SOL is likely to follow rather than lead and adopt the broader trend in the market.
