Solana did very little on Tuesday as we continue to hang around the neighborhood of $50. This is a market that has been sold off quite drastically, and it looks like the rest of the crypto markets. Crypto is a disaster, and it is likely to get worse from here. As risk appetite continues to be eviscerated, money will flow into the US dollar, which is what Solana is measured by.
Any rally at this point in time will more than likely struggle to get above the $60 level. After that, you have the 50-day EMA which is sitting at the $79 level and dropping. I think that even if we do break above that $60 level, it is likely to be an opportunity to fade short-term rallies that show signs of exhaustion. The Solana market has been brutalized right along with some of the bigger markets, and it’s not until Solana gets a bit of a boost from places like Ethereum that something like Solana can rally. After all, it is a much smaller market than Ethereum, and if people are not willing to jump into that market, they certainly are not going to be interested in buying some of these smaller coins.
The market has been in a downtrend for a while, and therefore rallies are to be faded. If we break down below the $40 level, then it’s likely that we go looking to the $30 level. After that, the market then goes looking to reach the $20 level underneath that. At this point, the market is going to continue to be very noisy, but it is obviously a situation where you cannot be a buyer anytime soon. In fact, we would need to take out the $80 level to the upside in order to get long. Furthermore, we would also need to see bullish pressure in Ethereum and Bitcoin. Without those two markets rallying, there’s no chance that something like Solana will rally for a significant move. I look at rallies as an opportunity to short this market with a bit of leverage to increase profits. At this point, I have no real interest in trying to pick up Solana or any other small coin in the crypto markets right now. It’s simply far too dangerous.
