In a shocking turnaround, Solana, which recently achieved a new all-time high nearly 3 months ago, has experienced a significant shakedown after making history. With SOL’s price facing significant volatility, concerns about an extended decline continue as the altcoin navigates a massive bearish divergence.
Massive Bearish Divergence Threatens Solana’s Price
A worrying trend has been cited on Solana’s chart that could determine its next price direction. Market expert and trader Mags points to a massive bearish divergence on its chart as SOL faces significant volatility due to unfavorable market conditions.
This development comes as Solana fails to hold above its current all-time high of $295 this cycle. SOL’s bearish divergence raises the possibility of further downside risk to key support levels. Despite the altcoin’s recent brief attempts at recovery, it suggests that momentum may be weakening.
The massive bearish divergence emerged in the weekly time frame chart. Furthermore, a significant horizontal support that has held steady over the past year is currently being tested.
Looking at the chart, the altcoin has also formed a key support at the Fibonacci level of 1.618 at $117, which marks a critical zone that must be held to prevent a drawdown. In addition, the Relative Strength Index (RSI) has moved to 40, a crucial level that previously acted as solid support for SOL in the past.
After delving into Solana’s recent price action and key indicators, Mags has highlighted 2 potential scenarios that could play out from here. According to the expert, the first scenario might be a bounce from here that eventually wore out. Such a scenario would lead to a steady bleed and breakdown of both the horizontal support and the 0.618 Fibonacci support level, which would not be a good sign for SOL.
On the other hand, the expert believes that a strong bounce from current levels is likely, accompanied by a continuation into a new all-time high. Meanwhile, the RSI indicator still has a lot of room to move higher, reflecting growing momentum.
Mags underlined that the SOL/BTC pair is also testing the 0.618 Fibonacci support level following a rejection from a falling trendline, providing further validity to the suggested scenarios.
Is A Price Reversal For SOL Imminent?
A recent analysis from crypto analyst Rose Premium Signals reveals that Solana is at a critical junction, capable of fueling a notable rally in the upcoming weeks. The expert’s prediction implies a possible end of the current correction as Solana gears up for an upsurge.
Rose Premium Signals highlighted that the altcoin is presently maintaining a major structural support level after a robust correction. Should momentum grow and the price breaks out, the analyst foresees an impulsive move to new all-time high targets such as $297, $338, and $385. As SOL prepares for a notable upsurge, an ideal accumulation zone is between $120 and $130, with the next key support level located at $105.
Featured image from Adobe Stock, chart from Tradingview.com
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