The FTX liquidity crisis hit the crypto industries, and retail investors are seeking an emergency exit by selling their stakes and investing in safer government bonds because central authorities do not back decentralized cryptocurrencies. If this liquidity crisis persists for a long time, then the value of all cryptocurrencies, such as Bitcoin, Ethereum, and Solana, will further decrease.
Last week, the leading cryptocurrencies were in deep trouble, and Solana, being a popular cryptocurrency, was in the red. This week investors are not confident about buying their stake because they are worried about the future potentialities of these cryptocurrencies and their sustainability for the long term.
Binance’s CEO came up with the solution with a recovery fund, but it has not been implemented yet. That is why we can find buying opportunities in Ethereum and Bitcoin, but the mid-cap cryptocurrencies such as Solana are still in the red.
If you are interested in the future projects and wide use cases of Solana, you have to wait for the next few months to understand the momentum before investing for the long term. You can read our SOL prediction and analysis by clicking here to get a short- and long-term trend after this downfall.
Solana prices might change drastically because the U.S. Congress and SEC are checking the issue of the FTX liquidity crisis, so any news can change the performance of cryptocurrencies in the next few weeks.
SOL has reduced more than half of its value from its recent highs. In the last few weeks, it has been consolidating within a range of $30 to $50. However, at the time of writing this post, SOL was trading around $18, which has taken support around $12. There are chances that Solana will attain this level.
Technically the daily chart is extremely bearish because, in the last week, Solana has broken the lower Bollinger Bands twice, while most technical indicators suggest bearishness and volatility. We do not suggest you invest at this time, at least for the short term, until SOL forms support on the weekly chart.
Even in the weekly chart, Solana has formed a bearish engulfing candle, which does not suggest positive momentum for the long term. If SOL breaks $12, it might test the level of $5, which will reduce the value of Solana significantly in the long term. We do not suggest investing in SOL in the next few weeks.