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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Felix Küster
Felix Küster

Felix Kuester works as an analyst and content manager for Captainaltcoin and specializes in chart analysis and blockchain technology. He is also actively involved in the crypto community - both online as a central contact in the Facebook and Telegram channel of Captainaltcoin and offline as an interviewer he always maintains an ongoing interaction with startups, developers and visionaries. The physicist has couple of years of professional experience as project manager and technological consultant. Felix has for many years been enthusiastic not only about the technological dimension of crypto currencies, but also about the socio-economic vision behind them.