Solana drifted a little bit lower on Friday as we continue to see this market struggle for traction. Furthermore, you can take a look at the 50-day EMA getting ready to cross the 200-day EMA as a very bad sign as well. Most longer-term traders look at this so-called “death cross” as a potential sign of a very long-term downtrend. That being said, it is quite often late and that does not necessarily mean that you should jump in and start shorting right away.
Another thing to pay close attention to on this chart is the fact that the highs continue to get lower, and if you squint just a bit, you can see that we are in the midst of a descending triangle. Breaking down below the $80 level could kick off significant selling that has a “measured move” down to the $55 level or so. That does not necessarily mean that we have to get there, nor does it necessarily mean that we will break down to begin with. However, it is obvious that Solana is struggling, and as long as crypto markets are struggling, on the whole, I just do not see how Solana will take off. In fact, the most important secondary indicator that you should be paying attention to is what Bitcoin is doing.
It does not take a genius to see that crypto has been struggling for quite some time. In fact, as long as we continue to get monetary policy tightening, I do believe that crypto is probably heading back towards a “crypto winter.” Depending on who you are, going into “crypto winter” could be a good thing as it allows you to accumulate projects that are going to continue to see a lot of promise down the road. This is the time that investors love because they can pick up so much crypto at such cheap prices. Unfortunately, most retail traders got involved just a couple of months ago, and it looks like they will probably get smoked again like they did a few years ago.
From the short-term aspect, I believe that Solana will continue to go lower and that rallies should be sold into. I have been short of this market a couple of times over the last several months, but it is worth noting that the grind lower has slowed down.
