Solana (SOL) Plunge Below $20: Will It Find Bottom or Keep Sinking to New Depths?

22 Sep 2023 by Crypto Presale 2 min read

This year has not been the best for SOL investors as the token has experienced a lot of ups and downs. Despite starting the year strong, running up by almost 150% in the first quarter of the year, Solana has been bearish for the most part of the year. SOL price has changed by - 0.89% in the last 24 hours, up by 2.73% in the last 7 days and down by 8.5% in the last 30 days. This shows that the SOL price hasn’t been stable in the last few weeks.

Solana's recent price drop can be primarily attributed to concerns regarding the potential liquidation of crypto assets linked to the now-bankrupt exchange, FTX. FTX's ownership of around $1.5 billion in crypto assets on the Solana network, as reported by Solscan, has raised worries in the market. This situation, combined with the ongoing legal battle involving the SEC against several crypto entities, including SOL, added to the uncertainty in the market.

Technical Analysis

Daily Timeframe

Source: TradingView

In the daily timeframe, SOL has been bearish since mid-July, after surging to over $30 before quickly settling below the resistance around the $26.50 level. Currently, SOL is trading at $19.38, which is below the 50-day EMA and 200-day EMA. This confirms the overall bearish state of Solana. Also, the Relative Strength Index is at 45.61%, which shows that the sellers are dominant in this timeframe. In addition, the previous day's candle closed in a bearish engulfing pattern, a bearish candlestick formation.

4 Hour Timeframe

Source: TradingView

In the 4-hour timeframe, SOL just broke out of a bearish flag pattern. Which is a bearish continuation pattern. Also, the current candlestick is trading below the 50-day EMA and 200-day EMA, which confirms that the bearish trend is still dominant in this timeframe. Also, the RSI is trending at 46.93%, which reinforces the bearish state on the higher timeframe.

Will It Find Bottom or Keep Sinking to New Depths?

Looking at the signals from the technical indicators, we can confirm that SOL hasn’t found a bottom yet, and the price might keep sinking to new depths. Also, with the overall bearish state of the cryptocurrency market, buyers are sitting on their hands and not pumping new capital into the market at the moment. If the token successfully breaks the flag pattern, we might see SOL crash to $17 in the next few days.

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