Solana Price Analysis: SOL Close To Testing Key Support, Rebound To $40 Still In The Cards

Last Updated August 3rd 2021
2 Min Read
  • Solana price is getting ready to test crucial support at $32, but bulls have eyes on $40.
  • The short-term technical picture affirms the ongoing pulldown.

Solana has led other altcoins in recovery this week, posting consistent gains from $22 to highs around $40. As discussed earlier, bulls are unlikely to rest until SOL climbs above this level, which may trigger another upswing to $40.

At the time of writing, the smart contract token is exchanging hands at $33. An ascending parallel channel contributes to the short-term support. Losses will likely extend to $33, but bulls are expected to regain balance and control over the price as they pull SOL back toward $40.

Solana's Generally Up-trending Market Must Secure Higher Support

The Moving Average Convergence Divergence (MACD) indicator adds weight to the pessimistic outlook. This is a technical indicator that follows the path of a trend and calculates its momentum.

At the moment, it has a vivid bearish impulse that came into the picture when the 12-day exponential moving average (EMA) crossed below the 26-day EMA. Note that this is the first time the MACD is flipping bearish since the start of the uptrend on July 20. As it closes the gap to the mean line, the odds for a bearish impulse will increase significantly.

SOL/USD four-hour chart

 SOL/USD four-hour chart

The Relative Strength Index (RSI) appears to have settled in the neutral zone following a drop from the overbought area. If the RSI settles around the midline, the trend will stay sideways before continuing either up or down.

Therefore, support at $32, and by extension, the channel's lower boundary will ensure that losses to $30 are averted while bulls will have ample time to execute their recovery plan.

Can Solana Resume And Sustain The Uptrend To $40?

The exact timeframe shows a recently formed golden cross pattern. This technical indicator occurs when a short-term moving average, like the 50 SMA, crosses above a long-term moving average (200 SMA), as illustrated on Solana's chart.

Traders often look out for this pattern to validated an uptrend and the price consolidating at a higher level. At times, the golden cross marks the beginning of a bull market. Hence, the ongoing correction could be a blessing in disguise, allowing more investors to come at lower prices.

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