Solana Has Reclaimed Its 200-Day Moving Average
If you’re looking for a decent risk-to-reward technical setup in the crypto market, Solana seems like as good a bet as any to me.
Keep tracking the 200-day moving average (blue line).
This chart shows the price of SOL and its 200-day simple moving average (SMA). The 200-day SMA is a constantly updating average of SOL’s price over the past 200 days. So it can give a good indication of SOL’s longer-term trend. Notice how the price was rejected (blue shaded circles) by the line in April and November last year. And again in February this year.
But this month, the price got above the 200-day SMA. And better still, it “retested” it this week. In other words, the 200-day SMA is now looking like it could be support for SOL – rather than resistance. Now, there isn’t much trading history to go by, but the last time SOL bounced off its 200-day SMA was in July 2021. It then staged a monster of a rally. Of course, there were other factors at play there and the line had an upward slope (i.e. the uptrend was much stronger).
Still, if the blue line is now supporting SOL, it could have a decent run ahead of it. In that case, I’d look to the Fibonacci levels shown as potential profit targets for a longer-term swing trade. But if the price closes a trading day back below the blue line (currently around $20.60), that thesis falls by the wayside. And you could see Solana head back down into the crypto abyss.
Disclosure: I personally hold SOL at the time of writing.