Solana (SOL) Price Bound for 10% Pullback Before Market Greed Peaks
beincrypto.com 27 September 2024 21:20, UTC Solana (SOL), like almost every crypto in the top 100, has witnessed a price increase since last week. While the altcoin has displayed impressive momentum lately, indicators reveal a decline could be imminent before further realized gains.
This analysis highlights the factors contributing to the anticipated drawback, the implications for SOL holders, and what could happen to the price afterward.
Solana Could Struggle to Maintain Bullish Momentum
The recent rally has reignited renewed confidence in the market. As a result, Solana’s price reclaimed $160, to the delight of its holders. However, amid increased trading activity and strengthened prices, the broader market is starting to get greedy.
On September 17, the crypto Fear and Greed Index was 33. As of this writing, it has risen to 61. This index ranges from 0 to 100 and acts as a barometer of investors’ emotional behavior. When the reading is close to 0, the market is in fear, which indicates a good buying opportunity.
Conversely, a reading close to 100 indicated greed, suggesting that the price could be due for correction. Considering the current reading, the market is greedy but has yet to reach extreme levels.
Read more: 6 Best Platforms To Buy Solana (SOL) in 2024
As such, crypto prices, including SOL, might still have a chance of trading higher. However, a look at the Solana daily chart signals a warning to investors.
Solana’s weekly chart also seems to reveal a similar sentiment. As seen in the image below, the token could encounter resistance at $170. This is because the region is a notable supply zone, which historically pegged Solana’s price back on several occasions.
Due to this, SOL could retrace to $145 or $142.86, as stated earlier. The Awesome Oscillator (AO) on the chart also supports the move. As a technical oscillator, the AO measures momentum using historic price movements.
Negative readings of the indicator suggest bearish momentum, while positive values indicate otherwise. With the current negative value, Solana might find it challenging to surpass $170.
SOL Price Prediction: Time for Caution
Based on the daily SOL/USD chart, the token has formed a rising wedge. This technical pattern is formed by two converging upward slopes: one representing the swing highs and the other the swing lows.
Generally, this pattern is bearish. In Solana’s case, the rising price might force the altcoin to retrace from the recent milestone of $160, potentially leading to a 10% drawdown to $142.86.
Read more: Solana (SOL) Price Prediction 2024/2025/2030
However, the forecast might be invalidated if buying pressure continues to increase and the token surpasses the upper-level resistance. In that scenario, Solana’s price could begin a move that takes it above $200.
