3 Reasons Why Solana Price Could Tumble To $140 Before Blasting To $200
Highlights
- Solana price climbs to $174 sparking FOMO as investors eye $200.
- Overbought conditions and the need to take profits are some of the facts likely to result in a sell-off.
- Investors with a long-term overview of Solana prepare to buy the dip if Solana corrects further.
Solana price debuted above $170 a day after Bitcoin price ascended to a new all-time high, topping out at $73,737. The third-largest smart contracts token has since the beginning of Q4 last year rallied from $20, rewarding patient investors.
What’s Behind Solana Price Rally
SOL, the token powering the ecosystem, buoyed by enhanced sentiment in the market, battled the uncertainty in the crypto market in January falling to $80 from a December peak of $125.
On top of the generally bullish market bolstered by growing interest, Solana is a vibrant ecosystem, bringing together developers in the decentralized finance (DeFi) space, stakeholders in Web3, investors, and more.
Solana’s performance in the previous bull run, when it surged to a new all-time high of $260, is spreading FOMO (fear of missing out). As investors foresee the blastoff to new all-time highs, they are not afraid to bet on Solana even as the price hikes to higher levels.
Why Solana May Halt The Rally Briefly Before Resuming?
According to the Relative Strength Index (RSI), Solana is extremely overbought in both short and longer timeframes. The four-hour chart reveals the RSI neutral, and falling from highs around 80.
Short-term support at $170 has already given in and paving the way for an ongoing correction. SOL hovers at $167 and is expected to attempt a bounce back from the previous day’s open at $163.88.
Recommended: 4 Top Altcoins To Buy For 10X To 100X Returns As Bitcoin Halving Beckons
The sell-off from Solana’s recent high can be attributed to profit-taking, which is the second reason why the token might drop to $140 before blasting off again toward the psychological resistance at $200.
Based on the Money Flow Index (RSI), an indicator that transacts the flow of money in and out of Solana, sell-side pressure is intensifying. If the downward trend from the overbought region (70 – 100) persists SOL will have no choice but to seek support at $160. Slightly below this is the 20-day Exponential Moving Average (EMA) which in connection with the dotted ascending trendline may absorb the selling pressure to stop Solana from falling to $150 and $140.
Thirdly, although the crypto market is bullish at the moment, it is uncertain whether a major retracement may occur before the Bitcoin halving due in April.
A new norm has emerged where investors are buying during the hype for a major event only to cash out immediately after the actual development. This is referred to as a buy the rumor, sell-the-news narrative.
Bitcoin halving happens every four years to control inflation by reducing the supply of BTC in the market. This is achieved by slashing miner rewards by half.
As supply dwindles and demand increases, Bitcoin price tend to rally after halving. Sentiment across the market increases exponentially, triggering more rallies among altcoins.
However, this buy-the-rumor, sell-the-news narrative clouds the performance of major altcoins like Ethereum and Solana, which may plummet significantly if Bitcoin encounters extreme turbulence.
- XRP to $9? Analysts Tip ‘XRP Is a Buy’ as Price Targets 200% Surge
- CZ Endorses Hyperliquid Rival Aster DEX, Token Rallies 1,500%
- Tom Lee’s BitMine Adds $84M in ETH as Expert Predicts Ethereum Rally to $5K
- Grayscale’s Crypto Index Fund Sees ‘Solid Start’ as SOL, XRP Institutional Demand Climbs
- Senate Democrats Urge Republicans for ‘True Collaboration’ to Quickly Pass CLARITY Act
- PUMP Price Forecast: Whale Buys 1B Tokens as Bullish Pennant Signals 65% Breakout
- Bitcoin Price Prediction: Analyst Highlights Breakout Patterns as Coinbase CEO Backs Crypto Structure Bill
- Dogecoin Price Prediction: Grayscale ETF Move Aligns With Cycle Breakout
- Chainlink Price Prediction: Whales Scoop 2M LINK as Analysts Eye 184% Breakout Rally
- Shiba Inu (SHIB) Price Prediction: Massive SHIB Burn and 80-Week Cycle Mirroring Past Rallies: Will History Repeat?
- Cardano Price Stays Above Ichimoku Cloud as Grayscale ADA ETF Approval Nears
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
