• Solana was launched in 2020 and had a massive rally, reaching an all-time high of $225.
• The bearish sentiment remains as it has been trading below the $40 mark.
• Bulls may want to wait for Solana to trade above $40 before establishing a long position, otherwise they risk testing the lows again.
Solana Overview
Solana is a cryptocurrency designed to support smart projects and decentralized apps. Since its launch in the first quarter of 2020, it had one of the most impressive rallies in the cryptocurrency market’s history and reached an all-time high of $225.
Bearish Sentiment Remains
The bullish rally ended abruptly and since then it has been trading below the critical level of $40. A series of lower highs is still valid which implies that bears will keep pressuring the market until there is a break above this level.
Risk of Testing Lows Again
Traders should focus on this key resistance level if they want to establish a long position as there is still a risk that the lows will be tested again if we do not see a break above this level soon.
Pandemic Impact
The pandemic did help fuel speculation in cryptocurrencies as people were throwing money into any project related to online businesses while governments flooded the financial system with cheap money. As such, at its peak in November 2021, Solana’s performance against USD has reached 18640.78%.
Bottom Line
In conclusion, bulls may want to wait for Solana to trade above $40 before establishing a long position as only then would we invalidate the bearish sentiment that persists while below this level. Otherwise, there is still a risk that we could test new lows soon due to further bearish pressure from traders looking for quick profits from shorting positions