Solana (SOL) is bleeding badly, but leading indicator flashes a buy signal: details

SOL appears to be “quite bullish” at the moment, one analyst claimed.

The past few weeks have been devastating for the cryptocurrency market, with Solana (SOL) being hit particularly hard.

While some analysts expect more losses in the near future, some indicators suggest that a much-needed recovery could be knocking on the door.

Buy now?

Earlier this month, SOL collapsed to around $60, the lowest level since the end of 2023. As of this writing, it is trading at around $63 (according to CoinGecko), a monthly decline of 33%, while its market capitalization has fallen to well below $40 billion.

However, according to Ali Martinez, the current bottom may represent an excellent opportunity for investors to jump on the bandwagon. he open The TD Sequential indicator has given a buy signal on SOL, which means the price could soon head north to $77.

Another technical analysis tool that indicates a possible rally is on the way is Solana’s Relative Strength Index. Its ratio (on a daily scale) recently dropped to approximately 15, its lowest mark ever. The index ranges from 0 to 100, and readings below 30 indicate that the asset is oversold and on the verge of a potential rebound. On the other hand, anything above 70 is a warning of a possible future decline.

User X Henry supported the optimistic outlook. they male SOL has pulled back recently but said it looks “quite bullish” at the moment, anticipating a W-shaped recovery beyond $88, assuming the bulls reclaim $79.9. Meanwhile, the analyst warned that missing the key support level at $60 could be catastrophic.

More pain to come?

Despite the positive signs, bearish market conditions remain a drag, with some industry participants anticipating a further collapse in SOL prices. X user cyclop Plasmodium A short-term decline to the $30-40 range, a level last visited in October 2023. However, the analyst is bullish in the long term, predicting a rise to $300 in the next year or two.

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Recently, many investors have shifted their holdings from self-custody to centralized exchanges: a development that intensifies fears of a further correction by increasing immediate selling pressures.

Another worrying factor is declining interest from institutional investors. Over the past few days, outflows from spot SOL ETFs have exceeded inflows, suggesting that pension funds, hedge funds and other market players have reduced their exposure to the asset. This in turn requires product issuers, including Bitwise, Fidelity, Grayscale, Invesco and others, to sell real SOL to properly back the stock.