Analyst Says Solana At Risk Of Pullback: Here Is The Target
December 05 2023 - 1:00PM
NEWSBTC
An analyst has explained how Solana may be at risk of a correction
based on the data of two SOL technical indicators. Solana Has
Recently Observed The Formation Of Two Bearish Signals In a new
post on X, analyst Ali has discussed why SOL could be at risk of
seeing a retracement shortly. The analyst has referred to two
technical indicators for the coin: the TD Sequential and RSI. The
first of these, the Tom Demark (TD) Sequential, is a metric
generally used for spotting probable reversal points in any
asset’s price. The indicator has two phases, the first of which is
a nine-candles-long “setup” phase. When nine candles of the same
polarity are in following a reversal in the price, the TD
Sequential setup is said to be complete, and the asset could be
assumed to have reached a likely point of a trend shift. Related
Reading: Crypto Analyst Says It’s “Not Too Late” To Buy Ethereum,
Here’s Why Naturally, if the candles are green, the setup’s
completion would point towards a top, while red candles would imply
a bottom formation. Once the setup is over, a thirteen-candles-long
countdown phase starts. At the end of these thirteen candles,
another probable change of direction happens for the chart.
According to Ali, a setup phase has recently formed for Solana.
Below is the chart shared by the analyst that shows this TD
Sequential pattern in the weekly price of the cryptocurrency. The
trend in the 1-week price of the asset | Source: @ali_charts on X
The graph shows that the TD Sequential setup has recently been
completed with green candles, implying that the price may have
already reversed toward a bearish trend. In the same chart, Ali has
also attached the data for the second relevant indicator: the
Relative Strength Index (RSI). The RSI is a momentum oscillator
that keeps track of the speed and magnitude of the recent changes
in an asset’s price. This indicator determines whether the asset is
undervalued or overvalued at the moment. When the metric has a
value greater than 70, it can be a sign that the asset is
overbought, while it being under the 30 mark suggests an oversold
condition. As is apparent from the graph, the Solana RSI recently
broke above the 70 mark and has remained inside the territory,
suggesting that SOL has been overvalued recently. Related Reading:
Bitcoin Triumphs Over $41,000, But Here’s What Could Prevent
$50,000 This would mean that two bearish signals are looming over
the cryptocurrency’s head right now. “A spike in profit-taking
could trigger a retracement to $47.6,” says the analyst. From the
current price, such a potential correction to $47.6 would mean a
drawdown of over 20%. Solana’s fate may yet be averted; however, as
the analyst explains, “SOL would have to print a weekly candlestick
close above $68.4 to invalidate the bearish outlook and aim for
$108.” SOL Price Solana had rallied above the $65 mark yesterday,
but the asset has already seen a pullback as it’s now trading
around $60. Looks like SOL has gone through some drawdown during
the past day | Source: SOLUSD on TradingView Featured image from
Shutterstock.com, charts from TradingView.com
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