Solana Price Forecast: SOL’s Downfall to $20 in Sight as Technical Levels Fade

Last Updated July 23rd 2021
2 Min Read
  • Solana trades beneath all the short-term moving averages as declines become apparent.
    • The MACD and the RSI add weight to the worsening technical picture as losses toward $20 beckon.

    Solana had recently lifted to $45 after testing support at $20. A newly established support at $33 failed to hold the price, allowing SOL to break out of the trading range. Meanwhile, the price can barely hold above $30, with losses lingering toward $20.

    Solana price breakdown around the corner

    It is worth mentioning that in addition to losing critical support at $33, SOL has dived under the 200 Simple Moving Average (SMA), adding credibility to the bearish outlook. A four-hour close beneath $30 may call more sellers into the market and perhaps push SOL near the primary support at $20.

    The four-hour chart brings to light a massively bearish Moving Average Convergence Divergence (MACD) indicator. This technical tool is rarely used to indicate oversold and overbought conditions. Nonetheless, traders use it to identify the general trend and whether to buy the dip or sell the bottom.

    When the MACD dives under the zero line, it is a bearish call, while crossing above the same level is a bullish signal. Investors are also called to buy when the MACD line crosses above the signal line. Meanwhile, the MACD line under the same signal line on the Solana chart implies a call to sell.

    SOL/USD four-hour chart

     SOL/USD 4-hour chart 062121

    Therefore, the overall technical picture is downward oriented, especially with the Relative Strength Index (RSI) closing in on the oversold region. Like the MACD, the RSI follows the trend of an asset. However, the MACD measures the strength of the bulls and the bears. For instance, the sharp drop toward the oversold is a crucial indicator of the aggressive bearish front.

    Looking at the other side of the fence

    Note that with support at the 200 SMA shattered, bulls are looking toward $25 for anchorage. Holding above this level may bring stability and renew the uptrend. A daily close beyond $33 (critical support turned resistance) will bolster Solana massively upward and close the gap to $60.