2023-2-1 19:00 |
The Solana (SOL) price has broken down from a long-term structure, fueling the possibility that it will begin a correction.
There was an absence of major Solana news last week. However, some minor events are worth mentioning. The winter school of Solana, a nine-week course for developers supported by the Solana Foundation will close its application process on Feb. 3. So far, there have been more than 200 applications.
Next, Friktion, a DeFi project on the Solana blockchain, announced that it is permanently shutting down since it is no longer cost-effective.
Solana Fails to Clear ResistanceSince Aug. 13, the Solana price has fallen below a declining resistance line. The line led to a rejection at the start of Nov., which resulted in a minimum price of $8 on Dec. 29. After that, the price started a significant upward trend that has since seen a gain of 227%.
However, the price of Solana stayed below the line despite the increase. Additionally, price displays a lack of strength by creating bearish divergence (green line) in the daily RSI and a bearish engulfing candlestick (white icon) over the past 24 hours. Both of these are bearish signs that indicate a downward movement is likely.
A daily close above the descending resistance line would negate this bearish Solana forecast. In that case, an increase toward the next resistance at $38 would be expected.
SOL/USDT Daily Chart. Source: TradingView Solana Price Prediction for Feb: Breakdown Will Lead to CorrectionA look at the technical analysis for the six-hour time frame shows that the SOL price just broke down from an ascending support line in place since the beginning of the year. Breakdowns from such long-term structures often lead to downward movements.
Therefore, it is possible that the Solana price may fall to the 0.382 or 0.5 Fib retracement support levels at $19.50 and $17.31, respectively.
On the other hand, reclaiming the line would invalidate this bearish outlook. Since reclaiming the support line would also mean that the SOL price would break out from the previously outlined resistance line, the readings from the six-hour time frame align with those from the daily one. Both give a bearish Solana price prediction for Feb.
SOL/USDT Six-Hour Chart. Source: TradingViewTo conclude, the Solana price prediction for Feb. is bearish. There are several reasons for this, such as the creation of a bearish candlestick, bearish divergence in the RSI, and breakdown from an ascending support line. A daily close above $27 would invalidate this bearish outlook and send the SOL price to $38.
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The post Solana (SOL) Price Slides After DeFi Project Shuts Down appeared first on BeInCrypto.
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