Presently, Solana (SOL) is once again encountering resistance around the $205 mark, a level that has proven challenging for the past week. Recent data indicates a heightened level of volatility for Solana following substantial gains towards the end of 2024.
Since November, SOL has been moving within the price range of $180 to $260, with neither extreme being decisively breached by market participants. Currently, the $180 level stands as a crucial support area, as highlighted by the bullish order block on the daily chart.
Encouragingly, a notable proportion of top traders are holding long positions, potentially signaling positive short-term prospects. Additionally, whale activity has shown some bullish indications, further supporting a positive outlook.
Challenges for Solana Bulls in Surpassing the $220 Mark
Despite a recent price rebound from $188, Solana has struggled to regain momentum in the market. The Chaikin Money Flow (CMF) has dipped below -0.05, pointing to significant capital outflows. Similarly, the Accumulation/Distribution (A/D) indicator has lacked direction since November, aligning with the sideways price movement.
Presently, the Moving Average Convergence Divergence (MACD) is below zero, underscoring the prevailing bearish momentum on the daily chart. This aligns with the overall bearish market structure observed since slipping below $242 in late January.
However, despite the somber tone on the higher timeframe charts, Solana maintains a bullish long-term bias, supported by the resilience of the $175 and $150 Fibonacci retracement levels. As long as these levels hold, there is a possibility of a renewed uptrend towards $260 and higher.
An analysis of the 3-month liquidation heatmap reveals a concentration of liquidation levels in the $160-$165 range, suggesting a potential price magnet effect drawing Solana towards this zone for liquidity.
Traders and investors should monitor the $190 support level closely, as a breach could trigger a downturn. Additionally, any negative sentiment surrounding Bitcoin (BTC) could exacerbate a potential decline in SOL prices. Conversely, a retest of the $150-$160 range could present a strategic buying opportunity for those anticipating further market cycles.
Disclaimer: The views expressed are personal opinions and do not constitute financial advice, investment recommendations, or trading guidance.