Solana (SOL) and Avalanche (AVAX) appear to have hit their lowest mark after the crypto market saw its value melt in the last 48 hours. As a result, SOL and AVAX prices have lost more than 50% of their value recently.
As the analyst known as “Insane Finance” pointed out, the lack of buyers at current price levels is a warning sign.
“Tier 1 tokens SOL and AVAX have crumbled as fear and despair echo in the cryptocurrency market. But the fall may not be over yet and they may pull back even further,” he said.
Furthermore, the analyst pointed out that Solana has plummeted more than 36% in the last three days, going from a high of $75 to a low of $48.
According to him, the sharp correction led SOL to test the lower bound of a parallel channel at $51.60, where it has been contained since September 2021.
“A decisive weekly close below the $51.60 support level could trigger a further 50% correction. Under such unique circumstances, Solana could collapse under selling pressure to $26 or less,” she said.
The analyst highlighted that SOL should hold above the channel’s lower trend line at $51.60 to have a chance to recoup some of the recent losses.
“Price history shows that each time the SOL rebounded from this support level, it marked the middle or upper boundary of the channel. Similar price action could result in a rise to $70 or even $95,” he said.
Meanwhile, in the case of Avalanche, the cryptocurrency has also seen a significant drop in the last three days. The Tier 1 token is down nearly 50% after losing its $51.60 support level.
“Now that Avalanche has reached the $28 target presented by this bearish technical formation, it remains to be seen if it can gain strength to recover,” he said.
According to the analyst, poor market conditions suggest that lower lows can be expected.
“But in order for that to happen, AVAX would have to print a weekly candlestick below $27. Breaking through this vital demand zone could encourage more selling among market participants, resulting in a drop to $17 or even $10 ”, pointed out.
On the other hand, to have a bullish scenario, the bulls would have to push AVAX above $37 and defend that level to invalidate the bearish outlook.
“Accomplishing such a difficult task could encourage marginalized investors to re-enter the market, pushing AVAX to $51.”