Solana (SOL) Faces Potential Downturn as Traders Exercise Caution

Solana has struggled to maintain its position above the $126 mark, leading to a correction in its gains. Currently, the SOL price is trading below $125 and may find support in the $120 area.

Key Takeaways

Solana's price has begun a downward correction, dropping below the $125 threshold against the US Dollar.
The price is now trading under $125 and below the 100-hourly simple moving average.
A bearish trend line is forming with resistance at $124 on the hourly chart for the SOL/USD pair.
Further losses could occur if the price dips below the critical $120 level.

Solana (SOL) Faces Potential Downturn

Solana's Price Trajectories Shift Downward

The price of Solana failed to exceed the $130 mark, resulting in a downward correction, similar to the trends seen with Bitcoin and Ethereum. The SOL price fell below $126 and $125, entering a temporary bearish phase.

The price has slipped below the 50% Fibonacci retracement level of the upward movement from the swing low of $117 to the high of $127. However, there appears to be buying interest around the $122 level. In addition, a bearish trend line is forming on the hourly chart, with resistance emerging at $124 for the SOL/USD pair.

Solana Price Analysis
Source: SOLUSD on TradingView.com

At present, Solana is trading below the $125 mark and beneath the 100-hourly simple moving average. On the upside, immediate resistance is present at the $125 level and the trend line, while more substantial resistance can be found around $128. If Solana can manage a successful close above the $130 resistance zone, this could pave the way for continued upward momentum, eyeing the next key resistance at $135. Any additional gains could potentially push the price toward the $142 mark.

What Lies Ahead for SOL?

Should SOL fail to overcome the $125 resistance, it may initiate another downward trend. The first level of support is observed around the $122 zone. Following that, a crucial support level is positioned at $120, which aligns with the 76.4% Fibonacci retracement level from the upward movement between the swing low of $117 and the high of $127.

If the price breaks below the $120 level, this could lead to a decline toward the $112 support zone. A closing price beneath the $112 support could invite further decreases, potentially sending the price down to the $105 support level in the near future.

Technical Indicators

Hourly MACD: The MACD for SOL/USD is gaining momentum in the bearish territory.
Hourly RSI (Relative Strength Index): The RSI for SOL/USD remains below the 50 mark.

Major Support Levels

$122 and $120

Major Resistance Levels

$125 and $128