Solana price analysis 19 Nov: is it time to sell the rallies?

Solana has entered a strong correction

Representation of stacks of the Solana crypto token                                 
What next for the price of Solana? – Photo: Shutterstock
                                

Solana has been one of the star performers this year, rallying about 14,000% to hit an all-time high of $259.90 on 6 November. Although solana has given up some ground since then, it still is up roughly 11,000% for the year to date.

High transaction speeds at a fraction of the cost compared with Ethereum may be one of the main reasons for solana’s rally. Many believe that solana could surpass Ethereum and is therefore referred to as the “Ethereum killer.”

Mindaugas Butkus, chief technology officer of Solana-based decentralised exchange Solanax, told Cointelegraph: “Growing demand for [decentralised finance] DeFi applications and [non-fungible tokens] NFTs on Ethereum led to exploding gas fees, which made it expensive to use ETH. Transacting on Solana is inexpensive and transactions are processed in no time, making it an attractive alternative for retail investors.”

Solana recently became the third cryptocurrency along with bitcoin and ether to be tracked by the Bloomberg terminal.

In further positive news, Reddit co-founder Alexis Ohanian recently announced that his venture capital fund Seven Seven Six and Solana Ventures are planning to invest $100m in building decentralised social media projects on the Solana blockchain. 

Considering the fundamentals, is the current fall in solana a buying opportunity? Will Solana go up? Let’s see what the charts project. Read our SOL price analysis to find out.

Solana price technical analysis: weekly chart

Chart displaying the Solana price on a weekly basis
Solana technical analysis, weekly – Credit: Currency.com

SOL’s price has witnessed a vertical rally since mid-July of this year. Generally, vertical rallies are unsustainable and are followed by sharp corrections. The SOL/USD pair seems to be in one such corrective phase.

The first support on the downside is the 38.2% Fibonacci retracement level of $206.07 and then the 50% retracement level of $192.43. If the pair rebounds off this support zone, it will indicate that demand remains strong and traders are buying on every minor dip.

The bulls will then make one more attempt to resume the uptrend. A breakout and close above the all-time high could open the doors for a possible rally to $308.

Contrary to this assumption, a break below $192.43 will be the first indication that the bullish momentum is weakening. The pair could then drop to the breakout level at $175.

Solana price technical analysis: daily chart

Chart displaying the Solana price on a daily basis
Solana technical analysis, daily – Credit: Currency.com

SOL’s price has been trading inside an ascending channel for the past few days. The bulls had pushed the price above the resistance line of the channel but could not sustain the higher levels.

The price turned down and re-entered the channel, indicating that the breakout could have been a bull trap.

Aggressive profit-booking by traders has pulled the price close to the support line of the channel. This is an important support to watch out for because a break and close below it could signal a possible trend change.

The pair could then drop to $170 and later to $155. Such a fall could delay the start of the next leg of the uptrend.

Conversely, if the price rebounds off the support line of the channel, the bulls will attempt to resume the up-move and push the pair to the resistance line of the channel.

Solana buy or sell at current levels?

Solana price analysis shows that traders may be rushing to the exit. A strong rebound off the support line of the channel may keep the uptrend intact but a break below it could extend the decline to $170 and then to $155.

The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.

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