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Solana lost roughly 10% of its value in unexpected fashion. The asset, which looked well-positioned for an upswing after the preliminary approval of an Ethereum ETF, now looks weaker than the rest of the market and it's unclear whether it will recover properly.
Looking at the chart, Solana experienced a sharp drop, dropping from around $176 to $164. This significant drop prompted SOL to test the support level at $160, which previously acted as a strong support area. If this level fails to hold, the next major support will be at $150, which corresponds to the 200-day moving average (orange line).
On the resistance side, Solana faces immediate resistance at $176, a level it struggled to hold before the recent drop. Above this, the next significant resistance is around $190, where the 50-day moving average (blue line) is currently located. Any significant recovery would require a breakout of these levels.
Several factors could have contributed to Solana's decline. First, market sentiment has been mixed following the approval of the Ethereum ETF, with some assets benefiting while others, such as Solana, have been hit. Additionally, technical factors such as the inability to hold key resistance levels could have triggered stop-loss orders, accelerating selling pressure.
The $160 support level is important for traders and investors. If Solana can hold this level, it may stabilize and move higher. However, if it breaks below $160, the next important level to watch is $150. This could signal a further drop and investors may need to prepare for more volatility.
Ethereum remains calm
Hopes of a price rally that many attributed to the Ethereum ETF effect ended up being a huge failure. There are quite a few factors that could be responsible for this poor price performance, but for the time being, the more important question remains as to whether the price can rise further than the story of a failed rally.
Ethereum has not been able to break through key resistance levels at this point even after its ETF approval, and a key reason for this is the type of approval (it was not a full-fledged S-1 type), so there is still a chance of further regulatory issues arising.
Furthermore, although the Exchange and Markets Authority granted this consent under delegated powers, it is subject to challenge over the next 10 days. All of this adds further uncertainty to the overall market situation.
However, it’s not all bad in the long run: the indisputable fact is that the approval of an Ethereum ETF, even if only partially, will set a precedent in the field, creating further possibilities and a bigger case for cryptocurrency adoption.
Cardano’s strange position
Cardano hasn’t seen much notable movement in the past few weeks as it is not the most watched asset in the market and does not bring about big fluctuations, however, we believe there is some potential here as ADA is approaching key support which could then provide a base for a reversal.
At this point, the chart shows that Cardano is establishing a new support level near the $0.45 mark. This level has been tested several times and has withstood downward pressure, perhaps indicating real interest in this price. The surge in volume on this new move certainly strengthens the argument that this is a key level for the price. If ADA can hold this level, it could be a good foundation to begin an uptrend.
On the daily chart, ADA’s immediate resistance is at $0.50, a price level where the ticker has been rejected in the past few days for future price action. What’s important to note is that a breakout above this price could see the current rally enthusiasm target $0.55, which is right where the 200-day moving average sits.
About the Author
Armand Sirignan
