Solana (SOL) – In a bearish situation inside the descending channel

Solana (SOL) – In a bearish situation inside the descending channel

Posted on Monday, June 6 2022 at 8:52 pm GMT+0000

Solana (SOL) has been forced to move backward thanks to resistance from the upper-line of the descending regression channel pulled from the 13 of May intraday peak.

The short-term oscillators shifted south suggesting that sellers may retake the reins. The RSI is losing ground in the positive region and approaching the 50-neutral threshold, while the %K line of the stochastic oscillator dipped harshly below the %D line promoting further bearish developments.

Moreover, the negatively aligned 20 and 55-period exponential moving averages are sponsoring the short-term bearish outlook.

If the bears drop below the exponential moving averages and the middle-line of the channel, they will approach the 4th of June low at 36. By snapping that floor, they will slice through the lower line of the channel and tackle the 161.8% Fibonacci golden number of the last leg higher at 30. Breaching this barrier too will pave the way toward the 261.8% Fibonacci extension level at 21.

In the event of a turnaround, the price will first need to exit the channel and overstep the 45 hurdle. Such a move will lead the path to the 23rd of May high at 55, ahead of the 15th of May top at 59.

In brief, Solana is in a bearish situation, locked inside the descending channel, and only a move above the 45 could bring some optimism for a more significant recovery, while a drop below the moving averages will accelerate the sell-off likely to new lows.