Solana (SOL) Price Is Poised To Drop further In The Face Of Potential Sell-off Pressure Grom FTX Exchange
The price of Solana (SOL) has dropped below a significant support area and confirmed it as resistance, indicating that the downward momentum is likely to continue in the near future.
FTX Exchange is awaiting court approval to liquidate assets, with a decision expected on September 13. If approved, they will sell approximately $3.4 billion worth of crypto assets at a rate of $200 million per week.
It’s worth noting that the amount of SOL held by the FTX exchange is valued at around $685 million. The sale of these assets could negatively impact the price of SOL.
Weekly Outlook
The price of Solana (SOL) has been declining since creating a deviation above the $27 resistance zone between July 10 and July 24 (highlighted in red ellipses). Such deviations often lead to significant declines.
Indeed, the price of Solana (SOL) has dropped since then and broken below the important support zone at $20.4 to $22.7. This zone was formed by previous resistance and the 0.5-0.618 Fibonacci retracement levels.
According to Fibonacci retracement theory, after a significant price move in one direction, it is expected to retrace a portion of the previous price level before continuing the initial trend.
However, breaking below the 0.5-0.618 Fibonacci level and confirming it as resistance afterward (indicated by the red arrow) could lead to a 100% retracement.
The RSI indicator has dropped below 50 and is trending down, supporting the continuation of the decline.
Therefore, it’s possible that the SOL price will continue to drop to the next significant support zone at $14.
Bearish Structure
The daily chart supports the possibility of a price decline based on the weekly timeframe, as the SOL price is continuously rejected by previous support zones (highlighted by red arrows). This shows that the bears are actively selling on mild rallies.
Additionally, the daily RSI indicator has not yet reached the oversold region, where has historically led to rebounds (highlighted by green arrows).
As a result, the SOL price may break below the nearest support zone at $19 and drop to the next support level at $17. This decline could potentially push the RSI into oversold territory.
Conclusion
The most likely scenario suggests that the SOL price will continue to decline in the near future, with the nearest target being $17 and potentially going lower to $14.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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