Solana (SOL) Fights to Hold $120—Is the Next Move Lower?

Overview

Solana’s price has faced significant challenges recently, failing to maintain stability above a key threshold. The cryptocurrency has experienced a notable decline, raising concerns about its potential to drop further in value.

Solana’s Recent Price Movement

Solana’s price encountered difficulties after failing to settle above $132, leading to a sharp decline. The price has now been consolidating losses below $130 and is at risk of further declines, potentially dipping below $120. The recent movement began with a fresh decline that saw Solana trading below both the $130 and $128 support levels.

As the price lost momentum, it dropped below $126, forming a low at $121. Following this, there was a slight recovery, which allowed the price to test the 23.6% Fibonacci retracement level of the downward move from the $134 swing high to the $121 low. Currently, Solana is trading below $128 and the 100-hourly simple moving average, indicating a bearish trend.

On the upside, immediate resistance is observed near the $125 level, with subsequent resistance at the $128 level or the 50% Fibonacci retracement level of the recent downward movement. A key bearish trend line has also formed, with resistance at $131 on the hourly chart of the SOL/USD pair. For Solana to initiate any recovery, it will need to defend the support levels at $122 or $120.

If the price fails to break above the $128 resistance, it may continue its downward trajectory. The initial support level is near $122, with the first major support identified at $120. A breach of the $120 level could lead the price to the $112 support zone. In the event of a close below this critical support, further declines toward the $105 support could occur.

From author

The situation for Solana highlights the volatility and unpredictability inherent in the cryptocurrency market. The failure to maintain key support levels suggests a growing bearish sentiment among traders. Monitoring the price movements and critical support and resistance levels will be essential for anyone looking to understand the future trajectory of Solana.

Impact on the crypto market

• Solana’s struggle to hold above key support levels may reflect broader trends in the cryptocurrency market.
• A potential decline below $120 could signal increased bearish sentiment among investors, impacting related cryptocurrencies.
• The formation of bearish trend lines and resistance levels suggests that traders should remain cautious.
• The price movements may lead to increased volatility in the market, attracting both short-term traders and long-term investors.
• Overall market sentiment could shift if Solana fails to recover, potentially influencing other altcoins and the performance of major cryptocurrencies like Bitcoin and Ethereum.