Coinspeaker
Death Cross Indicates Potential Conclusion to Solana’s 11-Month Bullish Trend
Solana
SOL
$131.9
24h volatility:
-3.1%
Market cap:
$61.55 B
Vol. 24h:
$2.27 B
has demonstrated impressive durability throughout the previous year, sustaining a robust bullish trend. However, recent market conditions suggest that this momentum may be at risk. Despite significant attempts to surpass a local resistance level around $138, Solana has encountered challenges in breaking through this pivotal point.
The failure to overcome this resistance has placed the cryptocurrency in a precarious situation, especially as it now rests near crucial support levels that could influence its future trajectory.
Photo: TradingView
Solana Confronts Significant Risks
One of the most troubling technical developments for Solana is the impending formation of a “death cross.” This bearish indicator occurs when the 50-day Exponential Moving Average (EMA) drops below the 200-day EMA. For many traders and analysts, a death cross serves as a caution that long-term bullish trends may be reversing, often followed by a notable price decline.
For Solana, this death cross would signal a potential end to the remarkable bull run that commenced in October 2023. Investors, who have largely been optimistic about Solana’s future, are now reassessing their positions as the likelihood of a market downturn becomes increasingly apparent.
On the technical side, however, the Moving Average Convergence Divergence (MACD) indicator provides a flicker of hope. While the overall trend persists in a bearish direction, the MACD indicates that short-term bearish momentum might be diminishing. This could lead to a temporary rebound for Solana, especially if the cryptocurrency can maintain its $124 support level.
If Solana manages to uphold this level, it could alleviate the downward pressure, allowing for a potential recovery. However, a drop below $124 could activate substantial selling pressure, possibly pushing the cryptocurrency down to its next safety net at $120. The $120 level is particularly vital as it has functioned as a solid support threshold since March 2024. Should this support be breached, Solana might find itself veering into a broader downtrend.
As of this writing, Solana is trading at around $130, with attention focused on the $124 support level as a potential recovery area.
Analyst Cautions Heighten Concerns
Crypto analyst Alan Santana has recently voiced concerns regarding Solana’s future. He emphasizes that although Solana saw substantial growth in 2023, the current trends in 2024 are less encouraging. Santana observes that recent spikes in trading volume are now indicating bearish trends, contributing to a decline in Solana’s price.
He cautions that the price could drop by as much as 42%, potentially hitting levels as low as $80. This would represent a significant decrease from recent highs. Santana’s worries are underscored by Solana’s lackluster performance despite Bitcoin’s rebound, suggesting that the bullish phase for Solana may be concluding. Investors are advised to proceed with caution and consider the potential for further declines in Solana’s value.
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Death Cross Indicates Potential Conclusion to Solana’s 11-Month Bullish Trend
