Following the sell-off in major cryptocurrencies, the price of Solana has made a strong comeback.
Despite the fact that SOL has broken a key bearish trend line, the upside appears to be fairly restricted.
If the price drops below the 78.6 percent Fibonacci barrier, the downside objective is $22.66.
Solana stock has made a strong comeback to $36, but support is eroding as factors from above provide a large ceiling on any further gain possibilities.
Market players have moved on from the recent sell-off in the bitcoin market. Most big cryptocurrencies have regained some of their losses, and altcoins have benefited from a tailwind as well. That tailwind, though, appears to be receding now.
The technicals do not paint a nice picture for customers who arrived late to the party, as evidenced by the Solana pricing.
On the weekly chart below, Solana price was able to partially break through a descending trendline that had been in place for several weeks. However, SOL does not appear to be staying above that trendline today, implying that a weekly closing above it is no longer likely this week.
SOL reached an all-time high of $37, when sellers were lining up to take over from purchasers. The 55-week Simple Moving Average (SMA), the prior monthly pivot, and a 50 percent Fibonacci level all operate as resistance in that area. As a result, the Solana price has three good grounds for sellers to come in short.
On the downside, Solana price has no resistance until it reaches the 78.6 percent Fibonacci level at $22.66, which is the first meaningful support.
Weekly chart of SOL/USD
Solana’s price is currently confined to the upside, and a move lower toward $22.66 is more appealing. SOL has the monthly first support at $21 and the 200-week SMA just below this support barrier, which could be a critical entry point for buyers.
If Solana stock closes above the trend line this week, greater upside is expected when SOL breaks over the monthly pivot and the 55-week SMA. At the 38.2 percent Fibonacci level, the next price target would be $43 to the upside./n
