Solana (SOL) – Heading for further lossesPosted on Monday, January 10 2022 at 8:59 pm GMT+0000
Public blockchain platform Solana (SOL) is moving to the downside since the beginning of November 2021, printing a series of consecutive lower tops and lower bottoms. The latest recovery attempt in late December got rejected by the 50% Fibonacci retracement level around the upper Bollinger band and was followed by a break below December 13th bottom signaling a confirmed downtrend.
The current price structure suggests further losses in the day ahead and technical indicators are backing up this notion. From a volatility perspective, the Bollinger Bands are widely opened, suggesting supplemental price fluctuations, and the Average Directional Index (ADX), which is used to determine if a security is trending or not, is rising well above the 20-mark, indicating that a larger directional move may evolve. Since -DI is positioned well above +DI, the movement is expected to resume to the downside.
After a failed retest of the 148.17 key support represented by the December 13th bottom, the price is now looking to drop firmly towards the support belt of 116.00 – 113.34. This zone consists of the Fibonacci golden number, as well as September 21st bottom. By successfully diving beneath that hurdle, bears will turn their focus towards the 227.2% Fibonacci extension at 57.82.
On the other hand, if the price finds some traction and bulls manage to push back above the 148.17 cap, they could send the price higher to test the 20 days Moving Average of the Bollinger Bands at 169.20. In the unlikely scenario of surpassing the Moving Average obstacle, the price could make movements to challenge the latest peak at 204.20.
To summarize, Solana is lacking any convincing upside power and all technical signs are favoring a further drop towards the support zone of 116.00 – 113.34.