Solana’s (SOL) price action has been facing significant challenges over the past 40 days, with the cryptocurrency experiencing a decline of 17.26%. Two market analysts, Carl Runefelt and Kaleo, have forecasted a downturn for Solana’s price action, with potential targets of $112.5 and $80, respectively.
Descending Triangle Pattern: A Crucial Juncture for SOL
According to Carl Runefelt, Solana is currently trading within a descending triangle pattern, which can have both bullish and bearish outcomes depending on its formation. Runefelt predicts that if bears dominate the market, Solana’s price could potentially decline to $112.5. On the other hand, if the pattern breaks out to the upside, Solana’s price could rise to $155, which is just above the pattern’s height and a level where significant liquidity is expected.
Kaleo’s Forecast: A Sharper Decline to $80
Kaleo, another market analyst, foresees a sharper decline for Solana, targeting the $80 level. This level has been identified as a key support zone, where sufficient liquidity is expected to counteract selling pressure and propel prices higher. Kaleo had previously projected $120 as a prime support zone to push Solana to new highs, but his focus has shifted to the $80 level as market conditions have developed.
Market Sentiment: Bearish Outlook for SOL
The Open Interest (OI) metric, which measures the total number of active contracts in a market to gauge liquidity and market sentiment, indicates a bearish outlook for Solana. At the time of writing, the Open Interest had fallen by 4.97% to $1.94 billion in just 24 hours, suggesting that traders anticipate a decline in Solana’s price.
Long Merchants Face Losses, Quick Sellers Dominate the Market
According to Coinglass, long merchants who expected a price hike for Solana faced losses, with $8.99 million lost in the last 24 hours as the market moved against their positions. Furthermore, the cumulative liquidation stage delta turned negative with a reading of -15, indicating that short sellers have begun to dominate the market.
Liquidity Clusters: A Potential Pivot Level for Price Reversals
Analysis revealed a wide liquidity cluster at and below the $120 level, suggesting that the price will trade lower into these liquidity areas. This could potentially create new liquidity clusters before acting as a pivot level for price reversals upwards.
Key Takeaways:
- Solana’s price action is at a crossroads, with potential targets of $112.5 and $80.
- The descending triangle pattern can have both bullish and bearish outcomes depending on its formation.
- Market sentiment is bearish, with traders anticipating a decline in Solana’s price.
- Long merchants face losses, while short sellers dominate the market.
- Liquidity clusters at and below the $120 level could potentially create a pivot level for price reversals upwards.
As the market continues to evolve, it will be interesting to see how Solana’s price action unfolds. Will the bearish sentiment persist, or will the cryptocurrency experience a reversal in fortune?
Disclaimer
Readers are encouraged to conduct their own research and consult with a financial professional before making any investment decisions based on this content.
