A potential bearish wave targeting Solana (SOL) has caught the attention of investors. Technical experts believe the current Solana price slip could indicate that the crypto asset could have entered the oversold territory, pointing towards the possibility of a price reversal.
According to data from TradingView, the dropping Solana price could signify another bearish wave at below $173 after the market failed to recover from the $165 resistance. There are suggestions that the oversold position resulted from increased activity occasioned by the recent launch of SOL’s Pump.fun. Interest surrounding the application is suspected to have renewed user engagement that positively influenced Solana’s performance, setting the stage for changes that will affect the token’s price trajectory shortly.
Solana Price Slip and RSI Readings
Solana continues to exhibit a Relative Strength Index (RSI) of 34.8, which shows a remarkable decrease from the 70 level just a few weeks ago. The notable drop could indicate an approaching bearish wave, meaning the coin could be shifting from its previous Bullish phase, where buying pressure has been overriding thanks to the increased selling activity. The RSI technical indicator determines the speed and momentum of an asset’s price movement.
RSI oscillates between values 0 and 100 and helps determine whether an asset is overbought or oversold in the market. As a rule of thumb, any RSI readings above 70 indicate that an asset is overbought and there is a chance of an impending price correction. On the other hand, all readings under 30 show that an asset has been oversold, which almost always points to a token preparing for a rebound. With the current Solana price slip and RSI readings heading towards the oversold 30 thresholds, the token may be experiencing a waning selling pressure, which could only improve if buyers stepped in.
A Reflection of the Sluggish Momentum
According to analysts, the dropping Solana price results from decreased on-chain activity caused by reduced momentum because fewer investors are possibly engaging with the network. According to data from DefiLlama, the total value locked (TVL) on the Solana chain experienced a drastic drop from $7.2B on October 27 to $6.2B on October 31, denoting a 13.8% drop, which shows developers and users reduced their activity level during the said period. Moreover, data from Blockworks Research shows a Solana price dip on October 31, 2024, when only the decreased network activity was recorded.
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The current bearish wave affecting Solana reflects the sluggish momentum affecting the entire cryptocurrency market, perhaps because of issues surrounding the impending outcome of the US election. All the same, analysts predict the Solana price slip may be temporary, considering the price has recently continued moving sideways without a clear breakout signal. Some experts are optimistic that SOL could exceed the $200 mark at the end of the ongoing bearish wave.
US Elections Could Ignite a Bullish Wave.
While the cryptocurrency landscape continues with its routine volatile nature, Solana has repeatedly shown strong resilience. As a result, pundits believe that SOL could be preparing for a breakout, significantly if Bitcoin eventually exceeds its all-time high. Such moves that most people think could happen after the US election are expected to ignite a bullish wave within the entire market and propel Solana past its current bearish wave. As a result, crypto investors should keep their eyes focused to note any potential upward movement that could offer a promising outlook for Solana in the prevailing market condition.
Conclusion
Despite the latest Solana price slip, most analysts believe the Bearish wave is temporary, and SOL is approaching a potential breakout. The breaking point is currently above $170, and should further gains be achieved within the next few days, investors should look out for $200 as the next potential target. Should SOL clear the current pivotal point, we could easily see the token return to a Bullish display. Any move above the current level will likely drive more gains and fuel new optimism among crypto investors, notwithstanding market volatility.
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The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.
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