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Blockchain is popular for decentralized applications, including Solana whose value has increased during the year 2023. The dApps are destined to become more and more numerous, with Europe aiming to provide a legal framework for the cryptographic services offered. With MiCA, clear rules will be set and may allow many companies to launch decentralized applications, each more innovative than the next.
Solana is intended as a solution to the temporary slowness of the layer 1 blockchain, Ethereum. A condition that could change, however, because Ethereum has just received the Shanghai update, and with it, a reduction in fees and increased speed on the blockchain. But, Solana had time to develop its ecosystem to make it attractive to businesses. Here is our technical analysis of SOL price.
Solana (SOL): the bears seem to have taken control
Despite her commendable performances in the last few months, Solana’s performance has been falling apart in the last few days. again, the market situation is due to vague statements from the Fed about Ethereum and its status. In fact, the crypto-currency has a staking solution that is controversial for the American authorities.
As well as that, The Fed continues to seek to achieve an inflation rate equal to 2%. This means higher interest rates and thus a contraction of the economy. As we know, there is a strong correlation between the crypto market and indicators such as the Dow Jones and the S&P 500.
For investors looking to trade SOL to take profits in a few days may need to hold off for now. Only a reversal of the Fed’s rate hike announcements could start the crypto sector higher.
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Our technical analysis of the SOL signal
Now that that context is done, why not dive a little into the details. Of course, other indicators come into play when it comes to determining the price of an asset. For SOL, we look at an RSI (Relative Strength Index) of 45 which tells us that the signal is entering a sell trend.
But the RSI alone is not enough, the MACD is also worth looking at. Therefore the trend of the asset can be determined more accurately. We can then see that the MACD crossed the downward signal line on April 20th.
This crossing fits perfectly with the moment when SOL fell, the day after the speech a Gary Genslerstill unclear about the quality of Ethereum.
Gary Gensler and Rep. McHenry argue over which $ETH is it a commodity or a security, and Gensler can answer the question 👇 pic.twitter.com/DTMtazYmuS
— Cointelegraph (@Cointelegraph) April 19, 2023
From then onMACD has not crossed upwards (e12, e26) which would suggest an uptrend. With this opinion, we can therefore think that there is a risk that SOL will continue its long descent towards the abyss.
The analysis of the moving media is also not good, how far will the carrier run?
SOL certainly does not have the wind in its sails and price barely moves above any moving average. This indicator can give us information to know where an asset is compared to previous levels and if the trend is good. Once again, SOL does not present good results on this side.
According to Fibonacci pivot points, SOL may come to test the support level located at $17.. It could then be the lowest level SOL can reach before raising. In the meantime, we will have to wait to see the news from the Fed on May 3rd.
Despite these economic difficulties, Solana is a solid blockchain with a bright future ahead of it. A good profit can be made on SOL if one comes in at the bottom. If you want to do that, find out how to buy Solana on our detailed article
Source: Trading View, CoinMarketCap
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