Solana has retraced by 9.4% after reaching a record high of nearly $260 on Nov. 6.
Further losses are possible as sell signals have surfaced.
A downswing to $216 could be seen as a bullish catalyst for SOL’s next leg up.
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Solana has lived up to its hype, posting more than 65% gains over the past month. Still, the high-throughput blockchain’s SOL token could soon take a breather before resuming its uptrend.
Solana’s Uptrend Might Slow Down
Solana might present a buying opportunity for sidelined investors before it re-enters price discovery mode.
The sixth-largest cryptocurrency by market cap appears to have entered a brief corrective period. The Tom DeMark (TD) Sequential indicator presented a sell signal on the three-day chart shortly after SOL reached a new all-time high at nearly $260 on Nov. 6.
The bearish formation developed in the form of a green nine candlestick, which is indicative of a one to four three-day candlesticks correction.
A spike in profit-taking around the current price levels seems reasonable, especially now that the hype around Solana’s Breakpoint conference is fading away. If sell orders were to pile up, SOL would likely pullback towards the $216 support level.
A retracement to $216 could encourage sidelined investors to get back into the market. Such correction can be interpreted as a retest of an ascending triangle’s x-axis where Solana had been contained between Aug. 30 and Nov. 2. Rising buying pressure around such a crucial support point might propel SOL towards $340 to achieve the bullish target presented by this technical pattern.
It is worth noting that a few lower cap assets appear to be breaking out. Chainlink, Litecoin, and XRP have surged by more than 7% in the past 24 hours. Although Solana’s price action is not correlated to these assets, the upward pressure could still spill over.
Under such unique circumstances, it is imperative to pay attention to the recent all-time high at $260. An upswing beyond this price point could invalidate the short-term bullish outlook and lead to further gains. If this is the case, then the $340 target could be reached sooner than anticipated.
Disclosure: At the time of writing, the author of this feature owned BTC and ETH.
This news was brought to you by Phemex, our preferred Derivatives Partner.
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