Solana Moves Below MA200 Explained (Market Crash Confirmed)Let's dive a bit deep about the dynamics of the current signal, trading below MA200, and why it is so crucial right now.
Context is king. Moving above or below MA200 can be a minor development just as it can be a major one. We are talking about technical analysis and we focus specifically on the Altcoins and Cryptocurrency market.
Here we can see the chart for Solana —SOLUSDT daily timeframe.
Solana is now moving daily below MA200.
The reason why this is a doom signal are several:
1) A major bullish wave precedes this event. The fact that Solana grew for more than a year opens the door for major bearish action. A correction can be long because growth was long. A correction can be strong because growth was strong. The market tends to seek balance.
2) High price. This is similar to the first factor. Since Solana is trading at a high price, losing a major support can produce a major crash because there is plenty of room to move lower. If Solana were trading at a low price, a loss of support wouldn't be that bad because the downside can be limited. This isn't the case here.
3) Moved above MA200 just to move back below. This is the most important signal and it has two aspects. (3a) Moving above MA200 just to move back below produces a failed signal, this reinforces the bearish bias; it makes it a stronger. (3b) The fact that Solana failed to grow after conquering a major resistance level, MA200, means that there are no buyers around. If even above MA200 there is no bullish continuation, no major rise, it means that people are not willing to pay a high price for these coins.
This all leads to the present situation, the market cycles between up and down. Once we are down, we can expect growth. When we are up, it is easy to tumble and this is what we've been seeing since March 2024. Lower highs and lower lows.
We are about to experience the continuation of the bearish trend. Solana is preparing to crash and the effect of this crash will be felt across the entire Cryptocurrency space. This is not only Solana; Bitcoin, Ethereum, Binance Coin and all the Crypto-giants are in the same boat. We enjoyed a major bullish wave and now we have to go through a correction before the next major growth phase. It is the way it works.
Once the correction is over, we will see long-term sustained growth. There will be a consolidation/accumulation phase after the crash. And only after months of this we can experience a new bullish phase.
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Namaste.
