Solana (SOL) under pressure: Crypto Analysis of October 11, 2023

Solana experienced an increase of +14% at the start of the month before entering a corrective phase. Let’s see the future prospects for the SOL price.

Location of Solana (SOL)

After testing $17, Solana was able to bounce back more than 44%. This latest movement seems to counter the short-term downward trend that the Cryptocurrency has taken. However, this momentum ended as it approached $25. Currently, the price of Solana is valued at close to $22 and is above the 50 and 200 day moving averages, still crossed downwards. This demonstrates the strength of this latest upward movement. That being said, it could still be a simple fix. Obviously the oscillators have demonstrated bullish momentum which is now tending to weaken. From a Chartist perspective, the Solana appears to form an ascending triangle. This figure is intended to be encouraging for a nice upward movement.

SOL/USDT price chart daily
SOL/USDT price chart daily

The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.

Focus on Solana derivatives (SOLUSDT)

The latest movements in Solana have caused slight liquidations of short positions, slightly impacting open interest. This suggests that sellers gave way to buyers at this time. Since then, Solana has entered a consolidation phase. Although this did not have a significant impact on open interest, we mainly observe liquidations on the buy side, which indirectly indicates a relaxation of buying pressure.

Open Interest & Liquidation SOL/USDT
Open Interest & Liquidation SOL/USDT

It is interesting to view the Liquidation Heat Map on Solana. Indeed, we can see that the price of the cryptocurrency includes a zone of high liquidity. These are around $18.50. As the market approaches this level, it could trigger a large number of orders, which, naturally, can increase the volatility of the SOL.

Liquidation Heatmap on SOL/USDT Binance
Binance SOL/USDT Liquidation Heatmap

Assumptions for the price of Solana (SOL)

If the price of Solana goes back above $25, we could anticipate a bullish continuation up to $27-28. The next resistance to take into account, if the upward movement continues, would be the $32 threshold. At this stage, this would represent an increase close to +45%.

If the price of Solana fails to hold above $20, we could consider a return to $18.50. The next support to take into account, if the bearish movement continues, would be around $17. At this point, this would represent a drop close to -21%.

Conclusion

The upward pressure of Solana is encouraging for the future of the Cryptocurrency. However, it is still too early to say that the SOL is following a medium/long term upward trend. This is why it will be important to carefully observe the price reaction on the different identifiable levels to confirm or not the different hypotheses made. Beware of potential “fake out” and “market squeeze” in each situation. Additionally, let’s not forget that these scenarios are based solely on technical analysis. The price of cryptocurrencies may change more or less quickly, depending on other more fundamental factors.

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