Recently, Solana (SOL) has displayed limited signs of recovery, with a modest increase of just over 3% in the last month. Presently, SOL is experiencing a 5.29% decline based on daily charts.
With the prevailing market sentiment leaning bearish, traders are expected to continue influencing SOL’s price downwards.
Anticipated Further Decrease in SOL’s Value
The recent decline in SOL can be attributed to its retreat from the resistance level at $160.09 as part of a consolidation pattern. This led to a subsequent drop in its price on the charts.
At the moment, the decline seems to be ongoing, as SOL is trying to find support at $128.18, where a temporary stabilization is anticipated before the next market move.
The potential drop to the support level at $128.18 is further supported by market sentiment and the Parabolic SAR (Stop and Reverse) indicator. Continuous price movement below the indicator’s dots signals a prolonged fall.
Interestingly, CryptoCrypto analysis suggests that SOL might be gearing up for a significant rally, drawing on its historical trading patterns.
Downward Trend Setting the Stage for a Substantial Rally in SOL
CryptoCrypto findings highlight the similarity between SOL’s current movements and those in 2021 before its all-time high. This resemblance indicates that SOL could currently be entering an accumulation phase akin to its previous cycles.
During an accumulation phase, traders gradually increase their SOL holdings in anticipation of a price surge, positioning themselves for potential profit from price upswings.
If this trend persists, there is a strong likelihood that SOL could achieve gains of up to 182.02%, hitting $361.88.
Diminishing Market Interest Contributing to SOL’s Price Decline and Substantial Losses
Recent data from Coinglass reveals that a noticeable wane in market interest has been a driving force behind SOL’s recent price drop.
This observation is supported by a marked decrease in Open Interest, a key metric for evaluating market sentiment, which plunged by 8.24% to $2.19 billion at the current time.
Furthermore, traders who previously anticipated a surge in SOL’s price have exited the market, resulting in liquidations totaling $10.88 million.
These developments collectively indicate a strong bearish hold on SOL, likely pushing the asset towards the critical support level at 128.18 on the trading charts.