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Bears are still in control of the price action as reflected by SOL’s descending price channel. Although the price has temporarily broken the upper bound of the channel, it is still too early to tell if this is the beginning of a trend reversal.
Momentum indicators are favoring a bullish outlook as the Relative Strength Index (RSI) has climbed above the 14-day simple moving average, which is typically considered a buy signal as positive momentum has picked up its pace.
Meanwhile, the MACD is in positive territory. However, it has already declined for the second day in a row during today’s drop.
Another encouraging sign favoring a positive outlook is a break above the 21 EMA, which is an early indication of a trend reversal.
Most of the technical indicators in the daily chart point to what could be the beginning of a reversal. However, the macroeconomic backdrop is quite bearish and sentiment is heavily depressed.
Hence, as it has happened many times recently, these false positives could result in a significant drop. Losing the $120 support again could result in a retest of the $100 level or could even push the token to lower lows as it would show that the bear market is still raging on.
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