Solana price fails to break trend with longs likely to suffer

• Solana price remains trapped within a bearish technical formation after a rejection from the 21EMA at $19.51.
• SOL could fall 10% below the last lower high at around $17.29, potentially opening the drains for a prolonged downtrend.
• This outlook would be invalidated upon a decisive daily candlestick close above $20.23.

Solana (SOL) price remains trapped within a bearish technical and could continue south unless bullish momentum returns to the market. The situation could have been worse if not for the blocks imposed by the court when it allowed the liquidation of FTX exchange’s $3.6 billion crypto.

Solana price faces rejection from 21EMA

Solana (SOL) price was rejected by the 21-day Exponential  Moving Average (EMA)at $19.51 after a bullish attempt to escape from the descending parallel channel. As it stands the Ethereum (ETH) killer remains trapped within the bearish technical formation and could continue falling for as long as SOL is within its confines.

The overall outlook points to an impending slump for Solana price, with falling momentum indicated by the Relative Strength Index (RSI). The Awesome Oscillator (AO) is also in the negative zone, adding credence to the bearish outlook.

Increased selling momentum could see SOL test the channel’s midline at around the $18.00 psychological level. In the dire case, Solana price could extend the slump to the channel’s lower boundary at $17.29.

In the dire case, the downtrend could dip Solana price into the demand zone, marked by the last candlestick before the July uptrend commenced. This area is primarily populated by buyers and could be the turnaround point for SOL.

However, if it fails to hold as a support level, a slip-through would render it a bearish breaker, extending the losses for Solana price, potentially toward the support floor at $14.49.

SOL/USDT 1-day chart

Liquidation data from Coinglass shows that the amount of long positions already liquidated is forty-five times (45 times) that of shorts.

SOL liquidation

On the flip side, increased buying pressure above current levels, marked by a breach of the channel’s upper boundary, and Solana’s price overcoming the 21-day EMA at $19.51 could clear the path for an uptrend. Confirmation would occur upon a decisive close above $20.23.

In a highly bullish case, the downtrend could reach the support floor at $14.49, constituting a 25% slump from current levels. 

Source

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