(Akash Girimath – FXStreet)
– Solana price has retraced 26% over the last four days, indicating that investors are booking profits.
– Market participants can expect SOL to drop another 20% and retest the $24.52 support level.
– A daily candlestick close below $24.52 will invalidate the bullish thesis.
Solana price is lacking bullish momentum, which has led to a huge correction. This pullback comes after an impressive recovery rally seen across the entire crypto space. Interestingly, the Solana ecosystem has undergone a major upgrade during these trying times and it comes from Coinbase.
The poster-child for crypto exchanges in the US, announced recently that it will be offering its users the ability to stake Solana. This new addition comes to an already big list of coins including Ethereum, Cosmos, Dai, Algorand, Cardano and Tezos.
While it might not be a huge announcement, staking, in some terms, removes some of the selling pressure in the market by locking users’ holdings. However, the technicals seem to be unaffected by this update.
Solana price searches for stable footing
Solana price rallied 66% after the June crash and set up a swing high at $42.89. This explosive recovery was a common theme across many altcoins in the crypto ecosystem and allowed SOL to briefly flip the $38.03 support level.
Due to a lack of renewed momentum, however, and investors booking profits, Solana price took a U-turn, leading to a 26% correction. Currently, SOL is trading at $31.33 which indicates that there is more potential to the downside.
Market participants can expect Solana price to drop another 20% before retesting the weekly support level at $24.52. Here, buyers are likely to step in and trigger another leg-up that will likely revisit the June 24 swing high at $42.89.
In some cases, the rally might extend to the weekly resistance barrier at $47.43, bringing the total gain to 93%.
While things are looking moderately bearish for Solana price, the retracement will help buyers accumulate SOL at a discount, providing some support to price. If buyers fail to step in at $24.52 and SOL produces a daily candlestick close below the said barrier, however, it will create a lower low and invalidate the bullish thesis.
Such a development could see Solana price crash to the next foothold at $19.