Death cross endangers Solana's 11-month bull run
Based on current technical analysis, Solana (CRYPTO:SOL) is nearing a "death cross," a bearish pattern where the 200-day Exponential Moving Average (EMA) crosses above the 50-day EMA, threatening to end its 11-month bullish streak.
Solana has failed to break the key resistance level of $138, raising concerns about its future trajectory.
If Solana breaches this resistance, it could revive its upward trend; however, failure to do so could lead to a breakdown below the critical $120 support level.
A potential death cross has alarmed investors who have remained bullish on Solana since October 2023.
The formation of this bearish pattern could invalidate the gains that Solana has accumulated over the past year, leading to increased selling pressure.
Despite these concerns, the Moving Average Convergence Divergence (MACD) indicator shows signs of a potential short-term recovery.
The MACD suggests that bearish momentum might be weakening, signaling a possible bounce near the $124 support level.
If Solana can bounce back from the $124 level as it did in early September, it could avert further losses.
However, a break below $124 could push SOL towards the crucial $120 support floor, where it has been consolidating since March.
A breach of this support level would invalidate the bullish-neutral outlook and could lead to a deeper correction.
Market sentiment remains mixed, with the short-term outlook showing room for optimism if Solana manages to rebound from current levels.
However, a confirmed death cross would likely result in a more bearish scenario.
If Solana breaks below $120, the cryptocurrency could face a significant downtrend, erasing much of its gains from the past 11 months.
At the time of reporting, the Solana (SOL) price was $130.73.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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