Solana Leads Crypto Market Crash as Technicals Turn Red

  • Solana leads the crypto market crash.
  • Bitcoin reaches monthly lows.   
  • Bearish indicators reveal sell signals for SOL

While offering the promise of high returns, altcoins are notorious for their volatility. One of these is Solana, which has seen significant ups and downs in recent years. SOL now leads in daily losses after an impressive yearly performance, registering an almost 600% gain.

Spurred by a significant drop in Bitcoin’s price, Solana is trending even worse. A look at the technicals also shows that the market’s outlook for the token’s near future is not great. 

Solana Drops With the Crypto Market

Once leading in bullish momentum, Solana is now leading the market downturn. On Thursday, July 4, Solana’s price fell by 7.22%, reaching $133.71, spurred by a general decline in the crypto market. This downturn is reflected in weak technicals for SOL, flashing sell signals. 

Source: TradingView

The moving averages for Solana, which identify trends over different periods, indicate a strong sell across multiple timeframes. Short-term moving averages reflect recent downward momentum and flash sell signals. The trend continues with 50-day and 100-day moving averages, which are also bearish. Long-term moving averages are mixed. The 200-day Exponential Moving Average indicates a potential support point for Solana at $131.23. 

Oscillators, which identify overbought or oversold conditions, are neutral. This includes the key Relative Strength Index (RSI) at 42.13, neither in overbought nor oversold territory. Stochastic %K and Commodity Channel Index (CCI) are also neutral, while the Momentum indicator and MACD show sell and buy respectively.  

Crypto Market Declines, Bitcoin in Monthly Lows

Solana’s technicals reflect a change in the broader market sentiment, which is turning bearish. Notably, Bitcoin is trading below $58,000 for the first time since February this year, posting a daily decline of 5.8%. The Bitcoin Fear and Greed Index, a key indicator of crypto market sentiment, is also in the fear territory. 

Bitcoin Fear and Greed Index.Bitcoin Fear and Greed Index.
Source: Alternative

This decline is likely due to concerns surrounding repayments from the defunct Mt. Gox exchange. After years of bankruptcy proceedings, the exchange will start repaying $9 billion worth of crypto to its former customers, including 140,000 Bitcoins, which are currently worth $8 billion. 

In these conditions, traders favor more established currencies like Bitcoin to altcoins. This is leading to higher losses for altcoins like Solana compared to Bitcoin. 

On the Flipside

  • Solana recently got a boost from the investment firm VanEck, filing for the first Solana Exchange Traded Fund (ETF). The move adds credibility to its claim to the “big three” in crypto, behind just Bitcoin and Ethereum. 
  • Solana is also flipping Ethereum in terms of DEX volume more and more frequently, suggesting that it could take the lead in this metric. 

Why This Matters

Technical indicators are key measures of market sentiment in any crypto token. Understanding these indicators is crucial for investors to make informed decisions.

Read more about the Mt. Gox concerns for Bitcoin holders: 
Bitcoin Tumbles Below $59,000 on Mt. Gox Repayment Concerns

Read more about VanEck’s Solana ETF filing: 
VanEck’s Solana ETF Hinges on SEC Leadership Change: Sigel

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Written by on 2024-07-04 19:30:00.

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