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The Relative Strength Index (RSI) sent a buy signal as it crossed over the signal line yesterday while the MACD’s histogram shows that negative has decelerated.
However, SOL is still on a downtrend until otherwise confirmed. The descending triangle shown in the chart is a bearish price pattern that shows significant selling pressure at any price above the support level.
As the price heads lower and comes closer and closer to this area, the selling pressure may increase unless market conditions change favorably and manage to reverse the downtrend.
This bearish bias is consistent with the overall macro outlook, which is unfavorable, and the market’s cautious tone and pessimistic sentiment.
If SOL breaks below $100 again, this would risk a 22% decline to the $78 area and possibly lower, to around $70, if Trump’s trade with China starts to have negative consequences for the U.S. economy.
Trading volumes were quite high around the $100 level, which emphasizes that there is a huge load of buy orders at that level. If sellers try to break below this area again, some of that buying power may have already been exhausted and this could favor a bearish breakout.
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