Well-known cryptocurrency analyst Bluntz issued a bearish short-term outlook on Solana following the asset’s steep selloff earlier this week. Besides publicly sharing his technical analysis on the X platform (formerly Twitter), he posted an illuminating chart showcasing Solana’s price movements.
Specifically, Bluntz pointed to a topping pattern developed on Solana’s daily timeframe, known as a “bearish selling climax” by traders. “I see 5 up visible daily for $SOL and a bearish sfp,” he tweeted, referring to the five consecutive green daily candles preceding the current large red down candle.
This pattern typically indicates that buyers became exhausted near recent highs. Moreover, he identified a bull trap forming at resistance near $108 when prices break above a resistance level but quickly reverse downward.
Additionally, the analyst noted that Solana remains in a clear uptrend on higher timeframes, with positively-sloping moving averages. However, he anticipates additional downsides in the short term before the next sustainable leg is higher. “Don’t be surprised if we pull back here back into the high 80s,” he commented, eyeing the high $80 level as potential support.
Doge2014 raises 500K in days celebrating Dogecoin. Make potentially big profits and get in on exclusive airdrop!
Show more +Furthermore, in a follow-up tweet later, Bluntz remarked on the swift pace of the decline this week. “So far, this dip is happening quite fast, faster than anticipated. Ideally, we bounce first before coming down for a C wave down into the 0.618 later,” he tweeted.
Here, he referenced the typical corrective Elliott Wave pattern, where prices fall in three distinct waves labeled A, B, and C. After a brief wave B bounce, he expects another drop to test the 61.8% Fibonacci retracement level, currently around $91.
At the time of writing, Solana trades around $96.50, down nearly 5% over the last 24 hours, according to CoinMarketCap pricing data. The recent swing high of about $108 is acting as tough resistance. However, despite his near-term caution, Bluntz remains constructive on Solana in the bigger picture. For the moment, though, he believes continuation to the downside remains the higher probability path.
You may also be interested in:
- How Crypto Trader Yielded Over $800K with DOT’s Rival Token
- Will Cardano Reclaim $0.65? Coinpedia Analysis Says ADA Upside Looking Likely
- $5SCAPE Will Be At The Forefront of the Next VR and AR Wave in 2024 – Here’s Why
We recommend eToro
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy the trades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.
