Why Analysts Advise Against Purchasing Solana at Present
Solana (SOL) has encountered a notable downturn of more than 15% within the last 48 hours, plummeting to a low of $121 on July 1. Weekly losses for SOL hover around 3%, with a 30-day decline of roughly 19%.
Despite this downturn and a fleeting recovery in the last 24 hours, trading specialist Alan Santana cautioned on TradingView that given the prevailing bearish sentiment, it may not be the opportune moment to invest in Solana. Several worrisome market indicators and technical analyses contribute to this caution.
As per the analyst, Solana’s market has been consolidating with a bearish inclination since March 2024, portraying a state of market indecisiveness.
Solana recently encountered a substantial bearish movement, marking the most significant decline since April 2024, reinforcing the bearish outlook and signaling heightened selling pressure.
The breach of the descending triangle support level serves as a critical bearish indicator. This pattern, commonly seen as a bearish continuation pattern, suggests that the prior support failed to hold, paving the way for further downward potential.
The escalation of bearish activity indicates an uptick in selling pressure, typically indicating a continuation of the downtrend.
Analysts suggest examining the weekly timeframe for a broader view, as a significant bearish move often necessitates time to stabilize, potentially spanning weeks or months.
Fibonacci retracement levels offer insights into potential support and resistance levels based on historical price actions. Crucial levels to monitor on the chart include:
– 0.618 Fibonacci Level: $88.36 – This level often serves as sturdy support, implying a noteworthy correction from current prices if reached.
– 0.786 Fibonacci Level: $55.26 – This deeper retracement level could represent another significant support zone, potentially offering an attractive buying opportunity.
At the current moment, Solana is priced at $139, displaying a strong bullish trend in the cryptocurrency market.
Data from DeFiLlama indicates that the Total Value Locked (TVL) in Solana has hit a notable $4 billion, indicating robust growth and heightened investor confidence.
Nevertheless, mounting bearish dynamics might compel Solana to retreat, seeking support at the $130 level. A further decline could push it towards the $120 support zone, potentially testing levels at $88.36 and $55.26, signaling a transition towards a bearish market sentiment.
Although there are glimpses of a potential bullish upturn, the market predominantly exhibits clear bearish indications, and initiating trades currently could entail potential losses. Investors are advised to vigilantly track the market and remain informed about any shifts in technical indicators that could hint at a change in the prevailing trend.
Disclaimer: The information presented in this article should not be construed as investment advice. Investing carries inherent risks, and one’s capital is at stake when investing.
