Key Takeaways:
- SOL consolidated for three days, dropping 10% in value.
- Grayscale Investments included Solana in their Large-Cap Fund.
- SOL could retest an old support line and kick off again.
YEREVAN (CoinChapter.com) – SOL, the native token of the “Ethereum killer” Solana, corrected downward and lost 11% in the past three days. The SOL/USD exchange rate stood at $152.8 at the London session opening bell. The correction came in the wake of a recent announcement from the largest digital currency asset manager Grayscale Investments.
Grayscale’s Solana Trust
The leading digital asset manager added Solana and decentralized exchange Uniswap to its large-cap investment fund. In detail, Grayscale sold some of the “existing components” of the Large-Cap Fund and used the cash to purchase Solana and Uniswap tokens.
According to the company, the recent purchase was the first time SOL appeared in the investment vehicle. The Solana component in the fund adds up to 3.24%, while Bitcoin takes 62.19%. As of the moment, Solana is the 7th largest cryptocurrency by market cap ($46 billion).
Solana’s inclusion in the Large-Cap fund will likely give the blockchain an advantage through increased exposure. Meanwhile, SOL’s price action not only didn’t follow the news but lost over 10%.
Also read: Solana (SOL) ready for a new rally after a month of consolidation; here’s why
SOL daily chart
A crypto analyst with a Twitter handles CryptoKaleo posted his take onSolana’ss prospects on Oct. 3. The support they pointed out is still relevant today, as the correction did not lead to a break under the suggested level. Instead, the analyst drew an accumulation/retest line that stretched through Q2 and Q3, right into Q4.
The digital asset followed the late September prediction and picked up right at the line. If SOL manages to retest the trendline as support again, it could take off into a new bullish phase. As of the moment, the traders” attention shifted towards the alpha crypto as it logged higher gains than many altcoins in the past three days.
Currently, the price action dropped right to the 20-day exponential moving average (EMA-20; blue wave on the chart above). SOL could use the EMA-20 and bounce off in the upcoming hours. Should the digital asset fail to hold on to the moving average, it still has a significant trendline to retest.
On the other hand, the relative strength index (RSI; momentum indicator at the bottom) plays the Solanabears’‘ advantage. The recent correction sent the RSI into a dive. Descending RSI could mean that the traders have low yield expectations and choose to withdraw.
Considering the factors listed above, the setback could be short-lived, and the upcoming sessions will show if Solana is ready for a new leg up.
Also read: Bull flag appears on Solana charts as SOL drops over 40% from a record high.
