Solana Faces Short-Term Pullback: TD Sequential Signals a Potential Reversal
However, a new technical signal suggests that the rally might soon face a short-term pullback. Ali (@ali_charts) highlighted this potential reversal in a tweet, referencing the TD Sequential indicator, which has flashed a sell signal on the 12-hour chart. Let’s dive deeper into what this means for Solana’s price movement.
Understanding the TD Sequential Indicator
The TD Sequential is a popular technical analysis tool used by traders to identify potential turning points in the market. It works by numbering consecutive candlesticks on a chart and identifying when the price movement may be exhausted. Here’s how it works:
- The Numbering Sequence: The indicator assigns numbers to consecutive candles, starting from 1, and typically looks for a series of 9 candles.
- Signal for Reversal: When the TD Sequential reaches the number 9, it indicates a potential exhaustion of the prevailing trend. In this case, the appearance of a 9 on an uptrend signals that the bullish movement may be running out of momentum, potentially resulting in a price pullback.
What the Chart Reveals
In Ali’s analysis, the 12-hour chart for Solana shows an upward movement that has brought the price to $136.72 at the time of the tweet. However, this bullish trend is now showing signs of exhaustion, as indicated by the TD Sequential Sell Signal at the 9 mark.
Key observations from the chart:
- Recent Bullish Momentum: The chart clearly shows a strong upward movement, with large white candlesticks suggesting increasing buying pressure.
- TD Sequential Sell Signal: The critical element of this analysis is the TD Sequential 9, which appears near the peak of the recent rally. This signal is commonly seen as a sign of a potential short-term reversal or pullback.
- Possible Short-Term Pullback: The appearance of the sell signal indicates that SOL may experience a brief price correction, with the potential for a slight dip in price before continuing its upward trajectory.
What Does This Mean for Solana’s Future Price?
The appearance of the TD Sequential 9 suggests that the current upward trend in Solana could be nearing its end, at least temporarily. Here’s what traders and investors might expect:
- Short-Term Consolidation: A pullback does not mean a reversal of the entire trend, but rather a consolidation phase. Solana’s price might dip for a brief period before resuming its upward trend.
- Potential Support Levels: While the pullback could cause a slight decrease in price, Solana may find support at lower levels. Traders often look for these support zones as potential entry points for buying on dips.
Conclusion: Is Solana’s Rally Over?
While the TD Sequential sell signal is flashing a warning for a short-term pullback, it’s important to note that this is not necessarily the end of Solana’s bullish trend. Pullbacks are common in any trending market, and they often offer buying opportunities for traders who believe in the longer-term bullish case.
For Solana, this potential pullback may offer a brief respite before the price resumes its upward trajectory. As always, traders should keep an eye on market conditions and be prepared to act quickly if the price moves beyond expected levels.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
