Markets could turn around anytime soon as numerous cryptocurrencies turn around
The first signs of a failed breakout appeared in the market as numerous cryptocurrencies began to reverse from their local highs. Shiba Inu has already lost around 10% of its value, ADA is trying to gain momentum and Solana is hitting the bottom of the local uptrend.
Solana is trying to stay in the uptrend
Despite the lack of momentum compared to assets like Shiba Inu or even GMT, Solana has been steadily moving higher in the local uptrend. So far, SOL has hit the lower trendline of the range, which should serve as support.
In a successful case, Solana should bounce off the trendline and continue moving higher, which should trigger a new wave of inflows into the asset and propel it even higher. As noted by prominent analyst Chris Burniske, Solana could act as a risk indicator for the cryptocurrency market, and its movement in either direction should be taken as a signal for investors.
In the event of a move down, investors should note: the market will most likely reverse as risk demand falls and cryptocurrencies could lose the only source of inflows they have now, namely retail investors. However, an upward move would be a continuation signal as it would reflect investors’ desire to continue to take risk rather than liquidate their positions.
Shiba Inu’s potential rejection
Over the past 48 hours, Shiba Inu has lost more than 10% of its value from the local high and even more from this cycle’s high. Unfortunately, the previously mentioned trendline resistance led to the rejection of the breakout and even caused notable liquidation volume.
The high leverage around SHIB’s current price could become the fuel for an accelerated downside reversal, which is the last thing the meme token needs right now. The drop below the 200-day moving average becomes simply confirmation of a continuation of the downtrend, which would make the current breakout attempt the third consecutive fakeout for SHIB.
Cardano is not giving up
Although Cardano produced far more subtle growth during this market reversal, it has entered a trend similar to Solana as it gradually moved higher without spikes in volatility and mostly followed the market.
Additionally, ADA has not reached any key resistance levels that would potentially trigger a reversal. The 200-day moving average is above the $0.4 price level while the coin is trading as low as $0.35.
Historically, Cardano has been a “lagging” cryptocurrency, meaning that while it follows the market, it sometimes moves against the general trend, which should not be taken as a personal strength of the asset.
At press time, Cardano is changing hands at $0.35 after gaining around 24% of its value over the past 24 hours. Compared to other altcoins, ADA’s growth has been slightly underperforming, but at the same time, the cryptocurrency has been among the least leveraged assets on the market, which should bode well in the event of a correction.