- Market analysts are pessimistic about the current Solana price outlook.
- Solana community is optimistic the latest selloff might be a much-needed cleanup.
Solana (SOL) is mirroring a bearish broader market sentiment with the price trading on a downtrend. Amid Solana’s dwindling prices, popular analyst and crypto trader Bluntz has cast a pessimistic outlook on the altcoin.
Analyst’s Warning to SOL Investors
Taking to the X platform, Bluntz said Solana flashed a bearish divergence on the two-week chart, similar to a previous pattern. Bluntz believes Solana’s price drop below the $220 mark signals potential future bearish outcomes.
The trader pointed out that Solana’s ongoing trend invalidates the ABC from the highs. The ABC pattern is a basic technical analysis chart trend consisting of three distinct price movements: A, B, and C. It usually indicates a potential price reversal or correction within a wider trend.
Bluntz noted the current trend makes SOL appear more impulsive and looks like there is a 2-week bear divided printing. The analyst thinks Solana needs a miracle to overcome the bear divergence.
His sentiment is based on the fact that Solana printed the same bearish divergence signal on the two-week chart in late 2021. This trend preceded Solana’s collapse from a high of about $260 to a bear market low of $8. The trader, therefore, thinks SOLs could follow a similar trend in the current market cycle.
Currently, SOL price was trading at $195.69, down 6.9% in the last 24 hours. This has pushed weekly and monthly declines to 16.7% and 10%, respectively.
Still, the 24-hour trading volume increased by 182% to $14.7 billion, suggesting investors’ willingness to buy Solana.
Hence, a resurgence in the market could push SOL back to previous levels or even hit new highs.
Favorable Upsides for Solana
Despite the recent retreat and analyst’s warning, the Solana community is still hopeful about the coin’s future price trajectory. Their sentiment is particularly based on Solana’s positive annual growth of over 100%.
Solana is still the fifth largest cryptocurrency, with a market valuation of $94 billion. As CNF mentioned in an earlier article, SOL achieved an all-time high of nearly $300 last month. At the time, the altcoin ranged from $245 to $273 before falling to the vital $223 support level.
Subsequently, SOL faced strong resistance at a key level, forming a double-top pattern, which signaled short-term bearish tendencies. In a recent update CNF covered, TradingView analyst Alan Santana commented that bearish price action is not always bad news. The analyst thinks Solana’s bearish action might represent a market “clean-up.”
Meanwhile, the Solana network continues to witness rapid ecosystem expansion. As noted in our earlier post, the Shiba Inu community is eyeing a potential collaboration with Solana. Industry experts foresee a mutual benefit, as both platforms have complementary strengths.
Surprisingly, Solana has outpaced Bitcoin and Ethereum regarding price appreciation and relative capital inflows since its bottom cycle in November 2022. A sustained period of favorable capital inflows has resulted in a net liquidity increase, offering strong tailwinds for price appreciation.
