Solana Price Shows Bearish Signals at $146, Indicating Possible Correction

Solana's price has reached the $146 resistance level, where bearish divergence is signaling a potential pullback. This weakening momentum suggests that there may be a decline toward lower support levels.

Key Takeaways

Solana's price is struggling at the $146 resistance, indicating a weakening upward trend.
Bearish divergence is evident, suggesting a higher likelihood of a price correction.
The $146 level is significant resistance; failure to break above it may lead to a downward move.
The Point of Control (POC) is a crucial indicator; falling below it could trigger further declines.
A potential target for downside movement is the $117 support level.

Solana price bearish divergence indicates correction ahead.

Overview of Solana's Price Movements

Solana price shows bearish divergence at $146 as breakdown risk builds - 1 SOLUSDT (4H) Chart, Source: TradingView

Recently, Solana’s price has shown signs of bearish divergence as it struggles to regain the $146 range-high resistance. Although there have been attempts to rise above this resistance, the underlying momentum is decreasing, evident through the formation of bearish divergence—a well-known reversal signal that typically appears near significant resistance levels.

Bearish divergence occurs when the price reaches a new high while momentum indicators, like the Relative Strength Index (RSI), show a lower high. This suggests that the strength behind the price increase is diminishing, even as the price attempts to rise further. In Solana's case, this divergence has clearly emerged around the $146 resistance level.

Understanding bearish divergence is crucial because it is not just a random occurrence. It often happens when an uptrend is fueled by fewer market participants, indicating a loss of buying strength as the price approaches a key resistance area. While the price may still temporarily move higher following the formation of divergence, this signal indicates an increasing risk of rejection once selling pressure starts to mount.

Solana's continued struggle to reclaim the $146 resistance, combined with the presence of divergence, strengthens the case for a bearish outlook. This suggests that the market is having difficulty maintaining strength and that sellers are likely defending this upper price range.

The Importance of $146 Resistance

Examining the market structure, the $146 resistance level is critical. Range highs serve as major resistance points during consolidations, and repeated failures to break above such boundaries can lead to downward price rotations.

Solana’s inability to close above the $146 mark indicates a significant amount of supply at these higher price levels. In robust breakout scenarios, prices typically rise above resistance with strong candlestick movements accompanied by increased volume. Conversely, when price growth stalls and momentum weakens, it suggests that the upward trend may be losing its drive.

As long as SOL stays below the $146 resistance, the chance of a breakout diminishes, increasing the likelihood of corrective action.

Key Breakdown Trigger: The Point of Control (POC)

The next critical level to look at for possible downward continuation is the Point of Control (POC). This level indicates where the highest trading volume has occurred within the current range and often serves as an important balance point. If the price remains above the POC, the market structure stays more stable; however, a break below it raises the chance of continued declines.

For Solana, falling below the POC would suggest that value is decreasing and would strengthen the bearish divergence signal. While divergence indicates growing weakness, clarity often comes from structural breaks at key support levels.

If Solana closes below the POC, it would reinforce the belief that buyers are losing their grip and signal a transition from resistance to downward rotation.

Potential Downside Target: $117 Support Level

If the POC breaks, the key downside target would shift to the $117 support level, aligning with the lower boundary of the broader trading range. This price point is expected to attract buyers and potentially stabilize the market.

A move toward $117 would represent a continuation of Solana's recent price behavior, where the asset has been oscillating within a range for several months. Market structures often experience cycles between resistance and support before achieving a significant breakout. Given the current divergence at the upper range, a decline toward support appears to be the likely outcome.

It's important to remember that reaching $117 does not necessarily indicate a long-term bearish trend. Instead, it reflects the market’s tendency to rotate and seek balance within the range until a sound breakout occurs, supported by volume and directional acceptance.

Looking Ahead: What to Expect

In the short term, Solana's bearish divergence at the $146 mark suggests that upward momentum is dwindling and the risk of rejection is increasing. Should SOL remain hindered below the $146 resistance and drop below the Point of Control, the likelihood of a more significant corrective move toward the $117 support level becomes greater.