The Solana Price Phenomenon: An Examination

Recently, we have witnessed some major moves regarding the price of Solana, or SOL. The phenomena gained significant attention in cryptocurrency, deserving a second look. Let’s examine the Solana price and its position.

Buyer support for Solana recently dipped to an anticipated 12% decline. The first half of August looked different for Solana buyers. Although it was a struggle, they maintained a position above the combined support level of $22.4 and the 50% Fibonacci retracement. As the month progressed, intense pressure to sell spiked again, causing an impactful loss of enthusiasm for buyers. As we know, crypto enthusiasts typically follow the most heavily bolstered trend. If a cryptocurrency refuses to be fruitful long enough, a decline of this kind is expected.

Now, we see a correction phase that has not concluded. Solana was struggling but holding firm amid adversity, but now, it must rally again, building its way back up from the current slump and the decline expected to continue into the near future. 

Solana has been in this correction phase for approximately two months. From a peak of $32.13, prices plummeted by 33.4%, reaching a disappointing trading price of $21.39. The sell-off on August 15 pushed this downward momentum further, a direct response to a dip in the price of Bitcoin. 

SOL’s come a long way from its $22.38 support level, allowing sellers to take advantage of it. They can effectively exert this force against buyers. If the pressure to sell continues, we could easily see SOL price drop another 12%. In that case, we could see SOL at $18.8. 

The seller’s reaction to the price drop is not surprising, but the buyer’s potential counterattack could very well be. If you look at the daily chart, a candle pattern shows instances of lower price rejection. This indicates efforts by buyers to hold the current value of SOL, or close to it, and refuse to settle for much less. This trend could trigger a minor pullback. SOL could quickly settle in at $22.38 and stay there with opposing forces acting as they currently are.

The situation begs the question: can buyers reverse the current trend? Consulting the daily timeframe chart alerts us to the downsloping trend characterizing the ongoing correction phase of the cryptocurrency. Sellers will likely exploit the resistance to sell, especially during a bullish bounce. If everything stays on the same trajectory, we see a line continuously headed downward for the foreseeable future. The best advice for potential buyers is to wait until the barrier breaks to signal a change in trend. Then, as always, strike when the time is right.

This post was authored by an external contributor and does not represent Benzinga's opinions and has not been edited for content. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice. Benzinga does not make any recommendation to buy or sell any security or any representation about the financial condition of any company. Cryptocurrency is a volatile market; do your independent research and only invest what you can afford to lose.