Solana (SOL) Faces Challenges: Will the $120 Support Remain Firm?

Solana (SOL) Faces Challenges: Will the $120 Support Remain Firm?

Summary:
Solana (SOL) is currently experiencing a decline, having dropped over 4.16%. The cryptocurrency has faced significant resistance while trying to escape bearish market conditions, causing its value to fall from a high of $134.72 to around $125. Key technical indicators show bearish momentum, raising concerns about potential further declines.

Key Takeaways:

Solana's price has fallen to around $125, with a market cap of $71.03 billion.
The Moving Average Convergence Divergence (MACD) indicates strong bearish momentum.
The Chaikin Money Flow (CMF) shows moderate capital outflows, suggesting selling pressure.
There is a potential risk of SOL testing the $120 support level.
A bullish reversal may occur if SOL surpasses the resistance at $130.57.

Current Market Status of Solana

At present, Solana is trading in the vicinity of $125, and its market capitalization stands at approximately $71.03 billion. The daily trading volume has surged, demonstrating an increase of over 74.65%, reaching about $5.05 billion. Recent data from Coinglass highlights a liquidation of $37.05 million worth of SOL within the last 24 hours.

Can Solana Sustain Its Support Levels?

Indicators like the Moving Average Convergence Divergence (MACD) and its signal lines are currently below the zero line, reflecting a strong bearish trend. However, if the MACD crosses above the zero line, this may signal a potential shift in momentum.

SOL Chart (Source: TradingView)

The Chaikin Money Flow (CMF), which is currently at -0.13, suggests moderate capital outflows in the Solana market, indicating more selling pressure than accumulation. For buying interest to rekindle, the CMF needs to rise above zero.

Given the current price pattern of Solana, there is a possibility of a sharp pullback testing the support level at $120.36. An extended correction could initiate the "death cross," which might push the price down to a previous low of below $115.21.

What Lies Ahead for Solana?

On the other hand, should bullish momentum return in the Solana market, the price could climb toward the nearest resistance level of $130.57. A breakthrough here could pave the way for the formation of a "golden cross," which would support a recovery, potentially bringing the price up to around $135.79.

Furthermore, the daily Relative Strength Index (RSI) for SOL is currently at 37.38, indicating weak momentum that leans bearish and approaching oversold territory. This level brings Solana close to a potential stabilization zone. Additionally, the Bull Bear Power (BBP) value of -6.44 confirms strong bearish dominance, suggesting that sellers are firmly in control with more downside pressure than buying strength, indicating aggressive distribution rather than a quick reversal.

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