Two weeks later, Solana’s (SOL) price went up, hitting a peak of $163.60. This spike hinted at a possible return to $200. But as of now, the cryptocurrency has dropped by 15%. It’s currently trading at $140.39, which raises concerns about further declines.
It seems Solana's bullish momentum is fading. Right now, the Moving Average Convergence Divergence (MACD) indicator shows a negative trend on the SOL/USD daily chart. The MACD helps signal trend reversals and measures price momentum. When the MACD is positive, it usually means bullish momentum is strong. Unfortunately, in Solana's case, a negative MACD suggests that the recent drop might continue.
Additionally, if the 12-day EMA (the blue line) crosses above the 26-day EMA (the yellow line), that would indicate a bullish trend. However, the longer EMA has crossed above the shorter one, reinforcing a bearish outlook for Solana.
Looking at the chart, SOL made an attempt at a V-shaped recovery between July 31 and August 10. This pattern occurs when an asset's price falls from a peak and then reverses back up. Normally, increased buying pressure would push the price higher. But Solana faced rejection at $163.60 and has struggled to bounce back since.
The chart shows that SOL is at risk of losing important support at $131.06. If buyers can hold this level, a rebound could happen. But if selling pressure increases, the price might drop to $121.09.
In-depth analysis of the daily chart reveals that the Awesome Oscillator (AO) is also in negative territory. The AO compares past price movements to recent ones to gauge market momentum. Similar to the MACD, a positive AO reading indicates upward momentum, while a negative reading suggests the opposite. Right now, the AO is negative, signaling that Solana's previous upward momentum is facing challenges.
If this trend continues, the token's value might slide further. The Fibonacci retracement indicator suggests that if buyers fail to defend the support at $131.06, SOL could pull back to $129.85. However, if the cryptocurrency manages to bounce off that support level, it might see a rise to $142.09 or even $151.98.