Solana (SOL) Faces Potential 40% Plunge as Resistance Holds Firm, Here Are the Key Levels to Watch as It Dips
A popular cryptocurrency trader has issued a bearish outlook for Solana (SOL), suggesting the digital asset could dive by as much as 40% if a critical resistance barrier continues to hold. The trader, known as KaKazazy on TradingView, provided a detailed trading strategy for the SOL/USDT pair, highlighting key support levels to watch on the potential downside.
According to KaKazazy, SOL continues to exhibit weakness, and a failure to break above the $160 resistance level could trigger another price decline while the cryptocurrency remains below two exponential moving averages (EMAs) – a technical indicator used to identify trends and potential reversal points.
“If SOL fails to break above the $160 resistance level, another price decline could be on the horizon while it remains below the two EMA lines,” KaKazazy explained.
In the event of a downward move, the initial support is around the $145 mark and the trendline. However, the first major support level is near $132, and a breach below this could see SOL testing the $120 level.
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Show more +The trader further warned that if SOL closes below the $120 support, it could potentially pave the way for a drop towards the $100 support level in the future, representing a decline of approximately 40% from the current levels.
It’s worth noting that EMAs are calculated by taking the average of a certain number of data points and giving more weight to the most recent data. They are commonly used by traders and analysts to smooth out price fluctuations and identify trends more clearly. KaKazazy’s analysis underscores the importance of key resistance and support levels in technical analysis, which can serve as potential turning points for an asset’s price movements.
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