Solana (SOL), currently trading at $186.39, has experienced a 7.7% increase in its price. However, according to a recent analysis by trader Alan Santana, the cryptocurrency’s strong weekly session, which is entirely bearish, may indicate the beginning of a significant correction.
What you'll learn 👉
Perfect Shape and Proportion of the Bullish Wave
Santana points out that the bullish wave in Solana’s price action has a perfect shape and proportion. This observation suggests that the current price movement is following a well-defined pattern, which could provide insight into future price action.
The trader also notes that each time the market stops, Solana enters a long period of consolidation. These consolidation phases are essential for the cryptocurrency to establish new support and resistance levels, which can help traders make informed decisions about entering or exiting positions.
Red Week as a Warning Sign
Santana is concerned about the strong bearish nature of the current weekly session and the high trading volume. A red week, in this context, can signal the start of a major correction that could last for several months.
Given the potential for a prolonged downtrend, the trader advises caution when considering investing in Solana at the current price levels.
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Show more +Waiting for New Support Levels
Santana advises investors buying Solana in anticipation of the 2025 bull run to wait for the establishment of a new support level before entering a position. By waiting for a clear support level to form, traders can minimize their risk and increase the likelihood of profiting from future price appreciation.
In light of the potential correction, the trader emphasizes the importance of selling at resistance (high) and buying at support (low). This classic trading strategy, often summarized as “sell high, buy low,” can help investors maximize their returns while minimizing their risk exposure.
By selling Solana when it reaches resistance levels and buying back in when it finds support, traders can take advantage of the cryptocurrency’s price fluctuations and potentially increase their overall profits.
Alan Santana’s analysis of Solana’s current price action serves as a cautionary tale for investors and traders alike. High trading volume and a strong bearish weekly session suggest that a significant correction may be imminent.
Santana advises waiting for new support levels to establish before buying Solana in anticipation of the 2025 bull run to navigate this potential downtrend. Additionally, the trader emphasizes the importance of selling at resistance and buying at support to maximize returns and minimize risk.
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