Solana Loses Uptrend; Analyst Warns Failure to Hold Support Could Result in SOL Falling to This Price
Cryptocurrency analysts are sounding the alarm as Solana (SOL) undergoes a critical phase, testing key support levels in its current market trajectory.
According to the insights provided by Cryptonary, SOL has experienced a setback, losing its primary uptrend. The focal point of concern is the $59 support level, with potential consequences that could lead to a pullback to $56 and, if that doesn’t hold, further down to $52.
In a detailed technical analysis, it’s revealed that SOL has breached its horizontal support at $61 and is currently positioned beneath its primary uptrend line.
The $59 level is now a crucial threshold; if it fails to hold, it may trigger a more substantial downward movement. The $56 mark holds significant support, but a breach could pave the way for a descent to $52, presenting a potential opportunity for dollar-cost averaging (DCA) strategies.
Examining market mechanics, Cryptonary points out that open interest (OI) remains close to recent highs, hovering around $983 million, albeit slightly down from $993 million.
The OI-Weighted Funding Rate has undergone a notable reset, moving to a more neutral stance at 0.012% from the previous day’s 0.080%. This indicates a rebalancing between long- and short positions in the market.
Cryptonary emphasizes that while open interest is poised for a potential flushout, the current positioning reflects a more even distribution between longs and shorts. Turning attention to technical indicators, the chart signals a potential downside for SOL, particularly if the $59 support is breached. In such a scenario, long positions could face liquidation, contributing to a reduction in open interest.
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The overall outlook suggests a likelihood of further downside for SOL, especially if Bitcoin struggles to make upward strides. Cryptonary expresses readiness to be a dollar-cost average buyer at the $52 level, provided the market presents this price point. Investors are advised to closely monitor these critical support levels and market dynamics as SOL navigates through this challenging phase.
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