Solana In Turbulence: Analyzing The Death Cross And What Lies Ahead
August 23 2023 - 8:40AM
NEWSBTC
Solana (SOL) has found itself under the shadow of a foreboding
technical pattern known as the “Death Cross.” This ominous
occurrence, defined by the 50-day moving average crossing below the
200-day moving average, has historically heralded significant price
downturns. Investors are now eyeing the charts as SOL
grapples with this pattern once again, raising questions about its
future trajectory. For the uninitiated in the intricacies of
technical analysis, the Death Cross is akin to a storm warning on
the horizon. It emerges when a short-term moving average dives
beneath a long-term moving average, signaling potential tumult
ahead. The last instance when Solana encountered the Death Cross
was back in 2022, and the aftermath was far from favorable – a
considerable downtrend that sent ripples through the crypto market.
Fast forward to the present, and Solana finds itself at a
crossroads once more. As of now, SOL is valued at $20.84 according
to CoinGecko, reflecting a 1.4% gain over the last 24 hours.
However, a more concerning figure emerges when considering the
seven-day performance, which showcases an 11.1% slump. These
numbers underscore the significance of the pending death cross and
the apprehensions it invokes. SOL market cap at $8.4 billion on the
daily chart: TradingView.com Bearish Solana Trends And Lingering
Uncertainties Analyzing the market structure on the 1-day chart
reveals a bearish picture for SOL. The cryptocurrency recently
established a lower high at $25.68 coupled with a lower low at
$22.23 on August 5. Subsequent weeks witnessed the gradual
formation of a downtrend, amplifying concerns among traders and
investors. Further technical indicators add weight to the
concerns. The On-Balance Volume (OBV) has been painting a
discouraging narrative as well, with declining demand for SOL
evident through the formation of lower highs since mid-July.
Related Reading: Polygon (MATIC) At June Lows Again – Prospects For
Bullish Recovery? The Relative Strength Index (RSI) depicts a
recent bearish momentum, hinting at potential further
declines. Additionally, the moving averages stand on the cusp
of signaling a dip, adding to the prevailing unease. Meanwhile,
bearish mood prevailed in the market, based on Open Interest. Even
though SOL was at long-term support, the drop in OI over the last
10 days was significant, and it has not reversed the downturn.
Source: Coinglass Potential Impact On Investor Sentiment And TVL
Despite Solana’s current Total Value Locked standing at a
noteworthy $243.85 million, the looming death cross looms as a
destabilizing factor. Past experiences have shown that such ominous
patterns can erode investor sentiment, potentially leading them to
seek safer investment options. Related Reading: AVAX Network
Activity Down – Will The Planned Token Unlock Bring Back The
Energy? Consequently, the TVL could face downward pressure as
investors contemplate safeguarding their capital amidst uncertain
times. As the crypto community holds its breath, the coming weeks
will undoubtedly be critical for Solana. Traders and investors will
closely watch for signals of whether history will repeat itself, or
if SOL will manage to defy the ominous prophecy of the death cross
and forge a different path. (This site’s content should not be
construed as investment advice. Investing involves risk. When you
invest, your capital is subject to risk). Featured image from Getty
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