Solana price has crashed in the past four straight days as concerns of its exposure to FTX rose. SOL plunged to a low of $16.92, which was the lowest level since March last year. It has crashed by more than 93% from its all-time high. So, is it safe to buy the SOL dip?
Solana and other cryptocurrencies plunged hard this week as concerns about its exposure to FTX and Alameda Research continued. On Tuesday, FTX collapsed after the company went through a major bank run. The main catalyst for the collapse was the fact that Alameda owned most of the FTT token.
As a result, most FTX customers decided to withdraw their funds, leading to a bank run. Historically, it is usually relatively difficult for a financial services company to survive when outflows are more than inflows.
Solana and other popular cryptocurrencies like Near Protocol have crashed because of their exposure to Alameda. At its peak, Alameda was one of the biggest investors in blockchain companies. It was also a key investor in Near Protocol and Solana. Therefore, Solana price crashed as investors predicted that Alameda will exit its investments.
SOL price also plunged as other cryptocurrencies continued falling. Bitcoin moved below $18,000 while the total market cap of all digital coins moved below $950 million.
The daily chart shows that the SOL price has been in a strong bearish trend in the past few days. As it dropped, it moved below the important support at $26.10, which was the lowest level on June 14. It also fell to a low of $16.60, which was the lowest level since 2021. The coin has fallen below all moving averages.
The Stochastic Oscillator has moved to the oversold level. Therefore, Solana price will likely continue falling as sellers target the next key support level at $15. A move above the key resistance level at $20 will invalidate the bearish view. This view is in line with my recent SOL price forecast.
This post was last modified on Nov 09, 2022, 08:58 GMT 08:58