- The crypto market crash resulted in $1 billion in liquidations, triggered by the drama in the Terra ecosystem.
- Major altcoins including SOL and ADA lose pivotal support levels.
The crypto market continued to be weak as major assets lost pivotal support levels. The market wiped out as much as $200 million on May 9, with over $1 billion in liquidations in the futures market in the past 24 hours.
Equities extended their downtrend with the S&P falling to a yearly low. Bitcoin (BTC) dropped to a new 10-month low and altcoins extended their down leg as they tagged the weakness in the financial markets.
BTC fell as much as 8% on the day to trade below $30,000. Ethereum (ETH), BNB Chain’s BNB, and XRP saw similar losses. Terra’s native token LUNA fell 50% as its sister coin, UST stablecoin, lost its peg with U.S. dollar, while “Ethereum killers” Solana (SOL) and Cardano (ADA) fared relatively better than the market with just a 6% and 1.5% drop respectively.
Analysts expect the market to enter a capitulation phase, which could mark the bottom. Markets seemed to be gradually recovering at time of writing and a sustained recovery would depend on how broader equity markets trade this week.
Solana Price Analysis
The failure of the bulls to push SOL above the 100-day Simple Moving Average (SMA) on May 5 may have attracted strong selling by the bears. The token continued its downward move and lost the critical support level at $75.
If the sellers sustain SOL below $75, it would suggest the start of the next leg of the downtrend. SOL could first decline to $60 and then to $48.
SOL/USD Daily Chart
If the price rebounds off this zone, the buyers would try to push and sustain it back above $75. If they succeed, it would suggest that the downtrend could be ending. The RSI was turning up, indicating that the buyers were coming to the rescue. This oscillating indicator also showed that SOL was recently oversold, and such circumstances usually signal a trend reversal.
ADA Price Analysis
ADA rose towards the $0.89 level on May 4 but the buyers could not sustain the higher levels. The token turned down on May 5 and broke below the strong support at $0.74 on May 9.
This fueled the resumption of the downtrend. Bears may now attempt to pull the price towards the $0.60 psychological level, which could act as a support. If the price rebounds off this level, the bulls will again try to push the pair above the $0.89 barrier. If they succeed, it will mean that the break below $0.74 may have been a bear trap.
ADA/USD Daily Chart
Alternatively, the RSI was still in the negative region and the price strength at 37 suggested that the bears still had the upper hand. Therefore, if the relief rally stalls at $0.74 or the $0.89 level, it would imply that sellers are selling at higher levels. ADA might then sink to the psychological support at $0.50