- Cryptocurrencies moved lower out of consolidation as the total crypto market cap dipped to $1.18 trillion.
- SOL was at an inflection point as bears threaten to take it to $12.
- MATIC bulls were required to flip $0.695 back to support to avoid sinking deeper.
The total crypto market cap was down 7.37% on May 26, closing at around $1.196 trillion. The sell-off continued today, with all top-cap cryptocurrencies flashing red.
Bitcoin (BTC) was down 1.7% on the day, Ethereum (ETH) 7.11%, and Cardano (ADA) 7.12% at the time of writing. Solana was the biggest loser among the top 10 digital assets, posting a loss of 10.93% in the last 24 hours. Other altcoins were also bleeding with Polkadot (DOT) down 6%, Avalanche (AVAX) 8.88%, and Polygon (MATIC) 6% on the day.
The cryptocurrency fear and greed index remained at 12 points, depicting ‘extreme fear’ in the market. This mirrors the wider sentiment in the crypto market amidst fears of an extended “crypto winter”.
Crypto Fear And Greed Index
Solana and MATIC lost crucial support levels on Thursday and continued downward. What next for these altcoins? Well, let’s find out.
SOL At A Turning Point
SOL was at an inflection point after dropping towards a significant demand zone ranging between $22 and $45. This buyer congestion area is crucial for the bulls since this was where they accumulated between May and August 2021, before staging a 500% uptrend to $267 record highs.
Therefore, a daily candlestick close above the upper limit of the zone at $45 would signal strength amongst buyers. Such a move would open the path for SOL’s ascent to $60 and later to $80 where the 50-day Simple Moving Average (SMA) sat.
SOL/USD Daily Chart
Apart from the technical setup, there were no other indicators that supported Solana’s upside in the near term. The moving averages were pointing down, as well as the Relative Strength Index. The price strength at 30 suggested that SOL was firmly under the control of bears.
In addition, the Supertrend indicator remained bearish since flipping red and moving above the price on April 11. As long as this chart overlay indicator continues to close above the price, the sell-off is set to continue.
As such, a daily candlestick close below the $36 swing low could push SOL towards the lower limit of the demand zone at $20. Further declines could trigger losses towards the $12 support floor.
MATIC Risks Dropping To $0.286
MATIC was trading in a fourth straight bearish session on Friday. Bears appeared determined to push the token lower. The down-facing SMAs and the downward movement of the RSI suggested that the market favored the downside. The price strength at 32 indicated that there was still more room for a downtrend and that the bottom may not be in yet.
If the price turns down from the current levels at $0.585, it may drop to tag the $0.476 swing low. Increasing selling pressure could push MATIC lower to fill the Fair Gap Value (FGV) created in April 2021, before finding support from the $0.286 support floor. Such a move would represent a 50% drop from the current price.
MATIC/USD Daily Chart
On the downside, if MATIC turns up from the current levels, it would rise to confront resistance from the $0.695 barrier. Overcoming this hurdle could clear the path for a move toward the $1.0-psychological level or the SMAs above it.