The Solana blockchain, which emerged very strongly during the summer of 2021, quickly became one of the essential platforms, especially for the NFT and DEFI ecosystems. But although the craze was present for a while, the Blockchain created by Anatoly Yakovenko recently experienced serious congestion problems, blocking the machine for several hours. This obviously led to a fall in the price of the Solana token. The latter having managed to stabilize at the beginning of the week, we are currently witnessing – partly because of the bitcoin boss – to a steep drop that could bring a very low Solana fence.
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Low fences dragging SOL through the mud
The Solana token suffered a catastrophic month of April. Chaining declines and daily closes lower than each other. Add to that that this fall is done in a very balanced way. Every big descending candle is followed by a perfect bearish pullback. The congestion of the last weekend having brought a big fall – about 14% – we had the right yesterday to a rising candle sign of increase. But what if it was just another bearish pullback?
To be honest, I looked at price action this afternoon before writing and saw a bearish pullback formation there. Unfortunately for the writing of this article, Bitcoin decided to fall and therefore take everyone with it. The analysis will therefore be quick, but we will still focus on tonight’s closing. Currently in Daily it is absolutely necessary to hold in closing the last trough, namely the 84.63 dollars. And although the curve is biased by Bitcoin, we are still going to check the H4 and H1 units.
A Solana fence near the cellar
As we can directly see. The candle at the time of writing the article is really not beautiful. And there is a good chance that it will take us below the last trough. We see, as in daily, the drop of the last weekend. Solana then stabilized for about three days. Then, as on Bitcoin, we went looking for liquidity, thus validating the bearish pullback.
But let’s be honest, given what Bitcoin had in store for us, this pullback might just be a coincidence. Especially with yesterday’s volatility following the FED’s decision to raise its key policy rate. Nevertheless, this fall validates a bearish pullback and the current candle could well lead us, in the evening, below the last low to protect. If we break the latter lower in the near term, I expect SOL to go directly to visit the support at $79.
Decisive closures in the evening for Solana
Zooming in on an hourly timescale, we see several interesting things. First, the trough to be defended has already held several times. Returning there could herald its breakout and a close below. Then we see once again that the last three hours were brought about by the fall of Bitcoin. We can’t stress this enough, but don’t gamble against the biggest cryptocurrency in the world.
If the latest low breaks out and even H1 closes occur below it, I expect we will head straight to the $79 support. And if the Daily close takes place in this zone of 79 – 84 dollars then I would most certainly wait for a bearish pullback on the 84 dollars and then go and break the support. Two possible scenarios, represented by dotted lines on the curve. Just for information: the following supports are located respectively at 70 dollars and… 35 dollars. A Daily Close above the Bearish Pullback would invalidate the scenario.
Solana was already out of shape. The multiple congestions of the ecosystem during the month of April led to a drop of nearly 38% in the price of the asset. Today’s closing, however, will remind us that it is Bitcoin that leads the dance and drags other cryptocurrencies with it. We can wonder what can currently keep Solana afloat, but good news still points the tip of their nose like the decision of Ox Labs to deploy on the ecosystem.
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