Solana (SOL) is currently experiencing a significant decline, dropping over 17% and reaching the critical $118 support level. This sharp downturn has put considerable pressure on this key level, raising concerns among traders and investors about the possibility of a further breakdown. Historically, the $118 level has been a stronghold for the cryptocurrency, but with the current bearish sentiment in the market, its ability to hold remains uncertain.
Using key technical indicators, this article will provide an in-depth analysis of Solana’s current price actions, assess the likelihood of breaking the $118 support, and explore potential scenarios for SOL.
As of this writing, Solana has dropped by 17%, trading at approximately $119.78 in the past 24 hours. Solana’s market capitalization stands at over $54 billion, reflecting an 18.45% decrease, while its trading volume has surged by 182.21%, surpassing $9.4 billion in the past 24 hours.
Technical Analysis: Indicators Pointing to a Potential Break for Solana
On the 4-hour chart, Solana has demonstrated significant bearish momentum, with the price dropping below the 100-day Simple Moving Average (SMA) and currently attempting a break below the $118 support level. A successful breach below this key level could lead to a further bearish move for the cryptocurrency
The Relative Strength Index (RSI) on the 4-hour chart has dropped to 24.74%, indicating an oversold condition. This suggests that SOL could extend its bearish move beyond the $118 level.
On the 1-day chart, Solana has faced increasing selling pressure, with the price consistently forming bearish candlesticks. This pattern indicates that sellers are gaining control over the market, pushing the price lower with each successive trading session.
Additionally, the formation of these bearish candlesticks, characterized by closing prices lower than their opening prices, reflects a pattern of sustained selling. This often signals underlying weakness in the asset.
Moreover, the 1-day RSI has also dropped below 50%, further supporting the possibility of a continued price decline. This drop indicates rising bearish pressure, with sellers remaining active and influential in the market, implying that Solana will likely continue to decline.
Potential Scenarios: What Happens if $118 Fails?
If Solana maintains its bearish momentum and closes below the $118 support level, it may continue to move downward to challenge the $99.44 support level. Breaching this level could lead to further price losses, potentially pushing the digital asset toward the $79.24 support range and beyond.
Conversely, if SOL’s price closes above the $118 support level, it may start to ascend once more toward the $160 resistance point. Breaking above this level could lead to further price gains, challenging the $170 resistance level and possibly higher levels.