Solana (SOL) price has increased 75% in the last two months. However, according to crypto analyst Yashu Gola, technical analysis shows that this could be an elaborate bull trap for the altcoin. We have prepared Yashu Gola’s analysis for our readers.
Have a big SOL crash setup?
Solana (SOL) price is up nearly 75% two months after bottoming out around $25.75 locally. However, the coin’s spectacular upward move is at risk of being completely destroyed by an ominous bearish technical indicator.
The so-called ‘head-and-shoulder (H&S)’ pattern occurs when the price forms three consecutive highs above a common resistance level. In particular, the middle crest (head) becomes higher than the other two shoulders, which are of almost equal height. The head and shoulders patterns dissolve after the price drops below the neckline. In doing so, according to the rule of technical analysis, the price drops by the distance between the apex of the head and the neckline when measured from the breakout point. It looks like the altcoin is forming a similar bearish pattern on its longer time charts.
On the weekly chart, the token forms the right shoulder of the overall pattern. It also suggests a correction towards the neckline at $27 in the second half of 2022. Meanwhile, a break below $27 is likely to result in an extended correction towards $2.80. In other words, a 95% price drop at the end of 2022 or early 2023 is a setup predicted by the analyst nicknamed ‘PROFIT BLUE’.
Is this a bear market rally for altcoin?
Solana’s extremely eerie bearish trend appears to be closely following trends in at-risk markets, primarily driven by the Federal Reserve’s hawkish response to inflationary pressures.
For example, SOL closed the week ended Aug. 14 with 10.5% profit, similar to Bitcoin (BTC) and the comparative S&P 500 index. Markets reacted to a softer-than-expected US consumer price index (CPI). This, in turn, raised the possibility that the Fed will slow the rate of interest rate increase.
But many analysts cite historical evidence of similar bear market bounces. In this context, it warns about these price increases that continue in risky corners of the market. So, if the correlation with riskier assets remains positive, SOL’s 75% risks of rebound turn into a fraud.
From a fundamental perspective, Solana is facing extreme FUD due to recurring network outages and rumor centralization. However cryptocoin.comAs you follow, the supporters of the project are bringing new updates to fix these issues. But analyst IncomeSharks suggests that even then, a 95% price crash is too ‘wild’. He says that would mean Solana has a carpet pulling project like Terra (LUNA). The next major drop could allow the SOL to explore bounce opportunities near a multi-year ascending support trendline, as shown below.
In other words, the downtrend of SOL is likely to continue until the price reaches $20, which is down more than 55% from the August 16 price.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Disclaimer: The articles and articles on Kriptokoin.com do not constitute investment advice. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.