Solana 18% gain may reverse: analysis
2024-10-16

After posting an impressive 18% rally over the past 30 days, Solana’s (SOL) price now faces the risk of a deeper pullback that could wipe out a substantial portion of those gains. On Wednesday, October 15, SOL attempted to retest the $160 level but failed to break through. 

The cryptocurrency is now on the verge of falling below the critical $150 support level. If SOL dips beneath this region, this analysis indicates that the drawdown could result in the asset ending October with a net negative return.

In August, when SOL reached the $153 mark, it quickly lost 15% of its value, dropping to $129.35. September saw a similar pattern with a 12% decline, while October followed suit with a 10% drop under comparable conditions.

If this pattern continues, Solana could be facing another double-digit decline. The indicator reinforcing this bearish outlook is the Chaikin Money Flow (CMF), which measures the volume-weighted average of accumulation and distribution. A higher CMF reading signals stronger accumulation, while a lower reading indicates increased distribution.

On the daily chart, the CMF has dropped below the zero signal line, signaling that Solana is facing heightened selling pressure. If the current trend continues, this further supports the forecast of a potential double-digit decline in SOL’s price.

If negative scenario plays out, SOL could see a 10% decline to $136.07, echoing the price movement seen between October 1 and 3. In an even more bearish scenario, if selling pressure intensifies, Solana might experience a further decline, with its price dropping to $125.02.

Conversely, if SOL manages to hold above the $150 support, a rebound could be on the horizon. In this case, Solana might rally toward $173, a level it hasn’t reached since July.