Solana has faced a strong correction period over the past week. While the asset is still among the top five tokens, it is 35% under its all-time value of $258. Now, over the past few days, negative press has been surrounding its network. A DDoS attack was reported on Solana, but luckily the network did not undergo any type of shutdown. Structurally, SOL’s price charts are extremely bearish, and a new low could be expected going forward. However, there might be a possibility of a bounce-back as well. As at press time, Solana had a market cap of $52 billion.
Solana 4-hour time frame
Over the past few weeks, Solana has consolidated under the trendlines of a falling wedge. Now, this particular pattern usually leads to a bullish breakout in the charts. Yet, there are a couple of things to take into consideration out there. First, Solana’s value is threading extremely close to the 0.618 Fibonacci line. This particular retracement zone is considered the last layer of support for any correction trend during a bullish run.
Hence, ideally, SOL should cater a position above $171 as soon as possible to maintain bullish decorum. Another worrying factor is the reducing volumes. Corrections over the past week have not been backed by strong selling pressure. This means there could be a massive influx in the capital, which may create a bearish divergence. Losing the $170 level, would mean an eventual re-test at $145 for Solana over the next few weeks.
Market Indicators
Market Indicators were contradictory at press time. Relative Strength Index or RSI suggested a recovery in buying pressure. But the problem remained that it was still hovering near the oversold region. MACD continued to indicate a bearish trend for Solana as the signal line hovered over the MACD line.
However, On-balance volume exhibited a positive sign. According to OBV, selling pressure could be reaching a point of exhaustion, and hence buying momentum may find more support going in the next few days.
How to invest in Solana right now
Right now, Solana is a very risky investment since its immediate trend is not clear. Investors should wait until it moves above the $171, or the possibly drop down to $145 is clear in the charts.