Is A Short-Term Rally On The Cards For Solana and Cardano?

    • SOL needs to flip $50 back to support to secure the uptrend.
    • ADA’s upside depends on holding above the crucial level at $0.50.

    It was expected that the US equities markets would recover following weeks of intense selling. However, this did not happen as Wall Street had a weak opening on Monday. This partly resulted in Bitcoin revisiting its lowest levels of the past week. Regardless, investors may expect top altcoins like Solana (SOL) and Cardano (ADA) to trigger a run-up.

    Equities Weigh Down Crypto Prices

    The downturn in equities once more accelerated declines in the crypto market, with several of the top capped cryptocurrencies recording close to 10% daily losses on May 24. Bitcoin (BTC) dropped 5% to $28,887 amid price volatility, the lowest in seven days. The big crypto has since recovered to $30,000.

    Nasdaq 100 lost 3.5% on Wall Street open, while the S&P 500 fell 2.4%. A pseudonymous Twitter user IncomeSharks observed the effect stocks have on crypto prices but noted that BTC was holding up relatively well.

    ETH dropped to trade around $1,900 and had since returned to around $2,014 at the time of writing. The biggest loser on the day was SOL, which dropped as much as 9.5% to $48.

    Could Solana and Cardano overcome the effects of the US stock market and embark on a relief rally? Let’s analyze their price action to find out more.

    Solana Price Analysis

    The bulls purchased the dip to $35 on May 12 and the token has been coiling up around $50 since then. The bears are attempting to push SOL towards the $45-psychological level.  The bulls are expected to defend this level aggressively.

    SOL/USD Daily Chart

    TradingView Chart: SOL/USD

    If the price turns up from $45, SOL may rise to $58, embraced by the 38.2% Fibonacci retracement level, where the bears will attempt to stall the uptrend. If that happens, the “Ethereum-killer” may trade between $50 and $58 for a few days.

    However, the Relative Strength Index (RSI) was positioned in the negative region and the price strength at 35 suggested that the buyers still had the upper hand. Moreover, the volume index showed reduced trading activity, which continues to deprive the token of the drive to make a hasty recovery.

    A break and daily candlestick close below the $45 level would be the first indication that the bears are back at it. The price could then drop to the swing low at $35. Alternatively, if the price turns down and breaks below $35, the pair could slide to the psychological level at $30.

    Cardano Price Analysis

    The buyers successfully defended the psychological level at $0.50 in the past few days, indicating demand at lower levels. The buyers will now try to push ADA above the $0.60 psychological level.

    If they succeed, the token could attempt a rally to the breakdown level of $0.74. The bears are likely to pose a stiff challenge at this major resistance level. If bulls arrest the subsequent decline at $0.60, it would suggest a change in sentiment from selling on rallies to buying on dips.

    ADA/USD Daily Chart

    TradingView Chart: ADA/USD

    On the other hand, the position of the RSI at 37 in the negative region and the reducing trading volume suggested that the ADA market was still biased to the downside. Therefore, a daily candlestick close below $0.50 would indicate strength amongst the sellers. This could see the price drop first toward $0.40 and later to the $0.38 swing low.

    Nancy Lubale
    Nancy is a cryptocurrency analyst and researcher. Her interests are in cryptoasset research, Fintech, Blockchain, DeFi, DAO and NFT sectors.

    Latest articles


    Subscribe to our newsletter to get the latest market analysis and news.

    Related articles