The Solana (SOL) price could break down from the bottom of its range and fall toward the 0.5-0.618 Fib retracement support area.
SOL is the native token of the Solana network, created by Anatoly Yakovenko. It uses a unique consensus mechanism which is a combination between a proof-of-stake (PoS) consensus and a proof-of-history (PoH).
The daily time frame shows that the Solana price created a double top pattern in January and February. The double top is considered a bearish pattern that usually leads to bearish trend reversals. The pattern was combined with bearish divergence in the RSI (green line). This further supports the possibility of a bearish trend reversal. The fact that the RSI is below 50 even further solidifies this.
If the price continues to decrease, the 0.5-0.618 Fib retracement support area could be expected to act as the bottom.
Solana (SOL) Price Struggles at Range Low
The technical analysis from the six-hour time frame shows that the Solana price has traded in a range between $20.80 and $26 since Jan. 14. During this period, it briefly deviated above the top of the range (red circle) before falling to the support of the range under a descending resistance line. The price has been trading inside the support area since the beginning of March.
The daily RSI provides a mixed reading. While the indicator is below 50, a sign of a bearish trend, it has also generated bullish divergence (green line), which often preceded upward movements.
Therefore, whether the SOL token price bounces at $20.80 and breaks out from the resistance line or breaks down from the bottom of the range instead could determine the future trend’s direction. A breakdown could lead to a drop to the 0.5-0.618 Fib retracement support area at $15.36-$17.60. However, a bounce could lead to a retest of the $26 resistance.
Due to the bearish readings from the daily time frame, a breakdown is the most likely scenario.
To conclude, the most likely Solana (SOL) price forecast is a breakdown from the $20.80 support area and fall to the 0.5-0.618 Fib retracement support region at $15.36-$17.60. A breakout from the short-term descending resistance line would invalidate this bearish outlook. In that case, the SOL price could increase to the top of the range at $26.
For BeInCrypto’s latest crypto market analysis, click here.
Disclaimer
BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
