Solana price is falling, but shorting it is risky, crypto analyst says

The Solana price has fallen for two consecutive days, falling 7.8% from this week’s high.

Solana (SOL), the fourth-largest cryptocurrency, fell from this week’s high of $225 to $207 on November 13.

Its decline mirrored the decline of Bitcoin (BTC) and other cryptocurrencies such as Ethereum (ETH) and Cardano (ADA).

Despite the sell-off, one analyst believes it is too risky for traders to short SOL at current prices. Kingpin Crypto, an analyst with more than 27,000 followers, warned in an X post that short selling the coin could be risky. He noted that Solana is moving out of its eight-month trading range.

Additionally, Solana maintains solid fundamentals as it has become a major player in the crypto industry. It has become the blockchain of choice for developers creating meme coins, for example.

According to CoinGecko, the total market cap of Solana meme coins has reached over $17.8 billion. Dogwifhat has a market cap of $3 billion, while Bonk, Peanut the Squirrel, and Popcat are each valued at over $1 billion.

Solana also surpassed Justin Sun’s Tron to become the second largest chain in the decentralized finance industry. Its total value locked has reached over $7.58 billion; The biggest players on the network were Jito, Kamino, Jupiter and Raydium.

Solana, which dominated Ethereum in DEX volume in October, is repeating the same trend this month. Its volume increased 91% over the past seven days to $24.55 billion; Much of this is thanks to the Ministry of Government Efficiency and trending Solana meme coins like Happy Coin.

Solana price will breakout and retest before coming back Solana price chart | Source: crypto.news

The daily chart shows that SOL price has pulled back after rising to $225 on Tuesday. It remained above the 50-day and 200-day moving averages, which are bullish signals. Additionally, the MVRVZ indicator moved sideways after rising to its highest level since March.

Most importantly, there are signs that Solana is about to form a breakout and retest pattern by moving into key support at $193, the June 29 high. A breakout and retest occurs when an asset rises above a key level, retesting it. and then continues its upward trend. If this is true, there are high chances that Solana will recover and retest $250 in the near term.