Bottom ahead? Solana paints its first 'death cross' as SOL losses 50% in January
Solana (SOL) looks poised to paint its first “death cross” this week, raising fears that its ongoing selloff would continue further into February.
Notably, the SOL price's 50-day exponential moving average (50-day EMA; the red wave) will eventually close below its 200-day EMA (the blue wave), signaling a bearish crossover, called death cross, that typically prompts traders to sell.
The threat surfaces as SOL looks to close January at nearly a 50% loss — as of the month's final day, the Solana token was down by over 2.50% to nearly $91, compared to almost $180 at the start. Meanwhile, the catalysts behind SOL's price crash remain pretty much intact.
Crypto-assets have fallen this month as traders have attempted to assess how fast the Federal Reserve would increase its benchmark rates from near-zero levels to tame booming inflation and tighter jobs market. Solana, as a result, has wiped half its market valuation in January from $55.19 billion to $28.79 billion. That is after it closed 2021 at a whopping 11,144% profit.
That has got some financial experts to expect a "crypto winter" ahead, a term referring to concerning bearish cycles in the cryptocurrency market, such as the one seen during 2018 wherein digital assets' combined market cap fell by more than 80%.
It’s during crypto winters that the best entrepreneurs build the better companies. This is the time again to focus on solving real problems vs. pumping tokens.
As of now, SOL's interim bullish outlook hangs over its possibility to hold above $83, its current support level. A break below the said price floor could have the Solana token find its next pullback opportunity not until $65, as shown in the chart below.
Both support levels were instrumental in sending the SOL/USD
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