Solana (SOL) Could Be Presenting a Potential Buying Opportunity for Investors

Cryptocurrency trading expert Trading Shot has identified this opportunity in a TradingView analysis posted on September 4.

Cryptocurrency trading expert Trading Shot has identified Solana (SOL) as a potential buying opportunity, based on technical analysis.

In a TradingView analysis posted on September 4, the expert highlighted a previous analysis from three months ago that advised against buying SOL until the decentralized finance (DeFi) token tested the 50-week moving average (1W MA50).

This projection has come to pass, with SOL hitting the 1W MA50 early this month. However, the token's recent price drop has put this thesis in a precarious position.

According to the analysis, attention has now shifted to whether the token can sustain its price above the 1W MA50. Failure to do so could lead SOL to plunge to the 200-week moving average (1W MA200), a crucial level for the survival of the bull cycle.

The analysis also pointed out the one-week Relative Strength Index (RSI), which has been in a corrective phase since SOL's March 2024 high. This correction is seen as a necessary adjustment following the massive rally in 2023.

Interestingly, the indicator is nearing the bull cycle's buy zone, which enables buyers to initiate major moves during bullish cycles rather than at bear market bottoms. This pattern is reminiscent of a similar one observed in December 2020, potentially signaling a new phase of buying interest.

Solana's next target

In terms of price movement, a review of past performances indicates that Solana's previous cycle saw an astronomical rise of 51,250% as it began forming its current long-term Fibonacci channel up.

If a similar growth rate is observed from the recent bear market bottom, Solana could potentially peak slightly above $4,000—an optimistic scenario. At the same time, the expert offered a more realistic and less risky target of $850, anticipated to be at the top of the Multi-Moving Bands (MMBs).

“A more realistic target for those who don’t want to hold for that long and assume higher risk, would be $850.00, which is expected to be at the top of the MMBs,” the expert noted.

It's worth noting that increased whale-selling activity could derail Solana's potential price trajectory. For instance, data shared by Lookonchain in an X post on September 3 revealed that a whale sold 695,000 SOL, approximately $99.5 million, this year.

Since the beginning of the year, the same whale has been on a selling spree, offloading an average of 19,306 SOL weekly, totaling almost $100 million worth of the token.

Solana has been among the best-performing digital assets in recent months, driven by elements such as increased interest in meme coins that are built on the network.

Solana price analysis

At the reporting time, Solana was trading at $134, with daily gains of over 3%. However, over the past seven days, the token has plunged by over 7%.

Although Solana demonstrates bullish sentiment in the short term, technical analysis from TradingView points to a more bearish outlook. According to a summary of the one-day indicators, the token is dominated by a ‘sell’ signal at 14, with moving averages indicating a ‘strong sell’ at 13. However, oscillators are ‘neutral’ at 7.

In conclusion, based on recent price movements, Solana's price trajectory will likely depend on overall market sentiment, considering the token has minimal network-specific fundamentals to drive a price rally.

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