Solana Falls 10%, Reaches Low of $79, What Next?

We have used technical analysis, sentiment analysis and on-chain data to assess if there is an opportunity in Solana after a 10% fall.

TLDR

  • Solana has fallen more than 9% on 23 January 2024.
  • The reason is mostly due to profit booking.
  • On chain and technical analysis shows a good future for Solana.

In the last 24 hours Solana has fallen more than 9% and almost 10% reaching a level of $80. A breakdown below the support of $88 was not expected as it was a strong support.

However, the price has recovered from the lows of $79.09 and is now at $82.45. If it falls further, the next support is at $71.

We have used technical analysis, sentiment analysis and on-chain data to assess if there is an opportunity in Solana.

Technical Charts for Solana

Solana Daily Charts as on 23 Jan 2023
Solana Daily Charts as on 23 Jan 2023

We can see from the daily charts that the price has rejected its support at dollar 88 and has slighted further below and is now trading at dollar 82.52 the next support for the cryptocurrency lies in dollar 71.23 which is a weak support. A fall below 71 is not expected as of now.

We can see the technical indicator RSI is currently near levels of 40, exactly at 39 .43 which is the bare minimum of levels for a cryptocurrency in the bull market. We expect Solana prices to reverse from this level.

However the MACD paints a negative picture where it shows a negative divergence on the daily charts.

We can see that, volumes in Solana are lower than the last few weeks. Also in the recent week, we have seen trading volumes have plummeted and now there is a net seller volume

Market Sentiments

Crypto Fear and Greed Index on Jan 23, 2024
Crypto Fear and Greed Index on Jan 23, 2024

The multifactorial cryptography and grid index shows that the levels are currently at 50 which shows that markets are in a neutral state of mind a month earlier the levels were at seventy one which showed the market enthusiastic of a up move

The fall in Crypto Fear and Greed Index score shows that people are currently wary of the near future because there is a expected profit booking after the Bitcoin ETFs were approved.

Also, several reports show that the FTX has recently sold Bitcoins worth $1.6 billion which is enough to impact the market price.

We expect the market sentiments to remain down for a bit and even after the profit broking ends, we expect the market to keep a sideways position.

On-Chain Analysis

  • Number of active addresses on the Solana blockchain has a very good growth there were 6.13 million addresses in September 2023 which grew to 21.33 million addresses as of December 2023.
  • The number of non-vote transactions on the Solana network has also seen a good growth. In 2023 September there were about 500 million transactions which grew to around 786 million transactions as of December 2023.

Overall on-chain data shows that Solana has a very sound blockchain. The number of users on its blockchain are also increasing so there is nothing to worry about the blockchain in terms of network growth and its future.

What to do?

Solana has been one of the best performing cryptocurrencies for the year of 2023 and is expected to continue its trend. It has strong fundamentals and has the core ability to process high amount of transactions securely. Also the popularity of its Saga Phone shows that the ecosystem is currently in an overall good phase.

Buying at dips would be the best strategy right now .

We at Crypto Bulz expect Solana prices to recover at least a month later.

Disclaimer: This is not trading advice, neither is financial advice. Until there is a regulatory approval for Crypto Advisors, we will stick to presenting just research.

Dhirendra
Dhirendra

Dhirendra Chandra Das is a Blockchain and DeFi expert with profound involvement in the crypto ecosystem since 2015, specializing in trading, investing, crypto journalism, blockchain consulting, and digital marketing.

With a proven track record in market analysis, portfolio management, and insightful crypto news writing, Dhirendra has been instrumental in the development and success of numerous blockchain projects, including exchanges and DeFi protocols. His technical expertise and marketing acumen have significantly contributed to project visibility and community engagement.

A committed educator and consultant, Dhirendra offers valuable insights into blockchain's potential, striving to propel the industry forward through collaboration and innovation.

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