Analyst Highlights Bearish Signals for Solana
In a recent analysis, Ali, a respected analyst, has raised concerns about the potential for a correction in Solana (SOL). This assessment is based on the observation of two key technical indicators: the TD Sequential and the Relative Strength Index (RSI).
TD Sequential Indicator
The TD Sequential indicator, developed by Tom Demark, is instrumental in identifying potential reversal points in an asset’s price. It consists of two phases:
- Setup Phase: A nine-candles-long phase following a reversal, indicating a likely trend shift.
- Countdown Phase: A thirteen-candles-long phase following the setup, signaling another potential change in direction.
Ali points out that a setup phase with green candles has recently completed for Solana, suggesting a possible reversal towards a bearish trend. The accompanying weekly chart visually illustrates this TD Sequential pattern.
Relative Strength Index (RSI)
The RSI is a momentum oscillator used to gauge the speed and magnitude of recent price changes. An RSI value above 70 indicates overbought conditions, while a value below 30 suggests oversold conditions.
According to the chart provided by Ali, Solana’s RSI recently broke above the 70 mark, indicating that SOL has been overvalued. This aligns with the bearish signals from the TD Sequential indicator.
Potential Correction and Price Prediction
Ali warns of a potential retracement to $47.6, representing a drawdown of over 20% from the current price. However, the analyst suggests that Solana’s bearish outlook could be invalidated if a weekly candlestick closes above $68.4, with a target of $108.
Solana’s Current Price
Despite rallying above $65 recently, Solana has experienced a pullback and is currently trading around $60.
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