📉 Trading below MA200 – Crucial turning point
In the world of technical analysis, a cross above or below the 200-day moving average (MA200) can be a game changer. Solana (SOLUSDT) recently slipped below this key level, and here’s why it could be a sign of doom:
1️⃣ A major uptrend precedes the downtrend.
Solana’s meteoric rise over the past year may have paved the way for a major decline. When a market goes up for a long period, it naturally seeks to balance out through corrections. Long growth often leads to an equally long correction — strong growth leads to strong declines.
2️⃣ High price = high risk
Solana is currently trading at relatively high levels. ❗ Losing key support at these levels could lead to a massive breakdown. If the price is lower, the downside risk will be limited, but here, there is plenty of room for the price to fall further.
3️⃣ Failed breakout above MA200
This is the most important factor:
🔍 (3a) A move above the MA200 only to pull back below it creates a failed signal, reinforcing the bearish momentum.
💡 (3b) Failure to see bullish continuation after breaking this crucial level indicates buyer exhaustion. Even above the MA200, there was no significant buying, suggesting that investors are not willing to pay a premium for Solana right now.
Lower highs and lower lows - downward trend in the movement
Since March 2024, Solana has been recording lower highs and lower lows, indicating a continuation of the downtrend. It’s not just Solana — Bitcoin, Ethereum, Binance Coin and other crypto giants are in a similar boat. We’ve enjoyed a long bull run, and now it’s time for the inevitable correction before the next big rally.
What's next?
After this breakdown, we can expect a long phase of consolidation/accumulation. Only months after this phase, Solana and the rest of the market will be ready for the next bullish wave.
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