I do not necessarily want to start shorting Solana, but you need to keep an eye on the $120 region if you already own it.
The Solana market fell a bit on Wednesday, but it has been relatively quiet. That being said, it looks as if the $135 level is offering a little bit of support, perhaps even trying to build a bit of a “double bottom.” This is a market that is following the rest of the cryptocurrency market, which of course seems to be finding support in some of the bigger coins and markets such as Bitcoin and Ethereum. If that does in fact happen, that should give Solana a bit of a chance to find its footing as well.
If we break down below the 200 day EMA, it is very possible that the breakdown may continue below the $120 level. If that happens, I think that Solana has much further to fall. However, there are a couple of other levels that you need to pay attention to, not in this market. For example, if Bitcoin breaks down below the $40,000 level, I suspect that Solana will get absolutely hammered. If that is the case, I do not think Solana will become a bad trade, nor do I think it will become something that you should not own. I just think at that point you should probably own it at much lower levels.
On the other hand, if we can break above the $160 level, at that point I think that Solana will start to pick up a lot of momentum, probably completely ignoring the 50 day EMA. This would probably kick off a lot of volatility to the upside, perhaps sending Solana back towards the $200 level. Keep in mind that cryptocurrency markets tend to move in the same direction overall, so at this point you would see bullish pressure everywhere. Furthermore, it would also suggest that we have just broken above a “W pattern” which measures for a move towards the $185 area as well. Regardless, I do not necessarily want to start shorting Solana, but you need to keep an eye on the $120 region if you already own it, because you could find yourself in a lot of pain if we break through there, just as we would see in Bitcoin and Ethereum, which cisurrently trying to hang on to the $3000 region.
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