Top crypto analyst Rekt Capital, in his latest newsletter, has scrutinized the current state of Ethereum and Solana, two prominent cryptocurrencies. His insights shed light on their intricate market dynamics and potential trajectories.
Ethereum: A Complicated Landscape
According to Rekt Capital, Ethereum finds itself in a complex situation. The cryptocurrency has rejected the green $3956 resistance level, mirroring past instances (red circles). However, Rekt Capital doesn’t anticipate a crash akin to early 2021, when prices plummeted to $1681. The current pullback is attributed to the delay in approving an Ethereum ETF, yet the potential for future approval makes a steeper correction unlikely.
Rekt Capital outlines a more probable scenario. In the second half of 2021, when Ethereum rejected the green $3956 resistance, prices dropped as low as $2791 (orange circle) before rebounding. Subsequently, the orange-boxed area became a support zone (blue circle), enabling Ethereum to rally and breach the $3956 resistance (green circle).
Consequently, if Ethereum cannot maintain the current orange area as support, the next level to tag would be the $2791 support (orange circle). Regardless of the scenario, Ethereum needs to reclaim the orange-boxed area as support to continue its uptrend.
Rekt Capital emphasizes that whether Ethereum achieves this now or after a dip into the $2700s doesn’t significantly impact the long-term bullish macro trend. However, it does present dollar-cost-averaging opportunities in the short term. A weekly close below the orange box could trigger a breakdown, while consistent support within this range should build momentum for the next leg up.
Solana: Breaching Resistance and Retesting Support
Last week, Solana broke through the blue resistance of $173 and is currently retesting this level to establish it as new support. Rekt Capital revisits an earlier move – Solana’s breakout from the green Ascending Triangle.
When Solana broke out from this pattern, prices had a weekly close above the black $123 level and retested it as support the following week. This confirmed the $123 level as a new Range Low, enabling a move across the range towards the Range High of $173 (blue).
Solana successfully breached the $173 resistance on its first attempt, unlike 2021 when it initially rejected from this level (green circle). Currently, Solana is attempting to retest the $173 blue level as new support, positioning itself for another move across the $173-$208 range.
Rekt Capital notes that a weekly close above $173 would bring Solana one step closer to a successful retest. This development could potentially pave the way for further upward momentum.
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Rekt Capital’s analysis underscores the intricate dynamics at play in the cryptocurrency market. While Ethereum navigates a complex landscape, Solana continues to break through resistance levels, setting the stage for potential future growth.
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