Recent weeks have seen Solana (SOL) experiencing notable declines in value. The news surrounding Solana has been dominated by negative developments that have influenced its price. Reports have indicated that a decrease in demand and network activity could lead to a further reduction in SOL’s value.
The significant 38% decline in decentralized exchange (DEX) activity and a drop in total value locked (TVL) have not been favorable for SOL. Analysis of price trends suggests that a pivotal range for potential recovery lies between $140 and $150.
SOL Drops Below $180 Mark – Is $120 the Next Stop?
After facing resistance at the $180 level on February 20, SOL witnessed a sharp 21.45% price slump. Bitcoin (BTC) had previously been holding above $95,500 but when it unexpectedly fell below $90,000, it triggered a bearish sentiment that led to SOL’s decline.
The On Balance Volume (OBV) has been on a downward trajectory since late January, exhibiting a series of lower lows since November. Despite this, the rally in January suggested that the prevailing downtrend might not dominate the market.
The Relative Strength Index (RSI) on the daily chart indicated oversold conditions. While this didn’t guarantee an immediate reversal, it hinted that the $135 level could act as temporary support.
Losing the $151 level, a crucial 78.6% Fibonacci retracement, paved the way for targeting the September low of $120.
Analysis of the 3-month liquidation heatmap showed that the liquidation levels between $165 and $135 had been breached, with immediate targets possibly around $125.
Reclaiming the $150 level could prompt SOL to consolidate within the $140-$160 range. The token tends to be drawn to large liquidity zones, but the absence of significant levels in the vicinity suggests a struggle to surpass $160 in the near future.
Short-term goals might include testing levels at $143 and $161, but breaching the $140 mark could prove challenging based on current liquidation patterns. An upward movement beyond $150, coupled with a rise in Open Interest, might alter this scenario.
Further scrutiny indicates a likely test of the $143 level soon, with potential targets in the $160-$176 range, albeit with a delayed realization. A drop to $125-$130 post the $143 zone test may follow before any recovery commences, while the $120 threshold’s ability to deter further bearish trends remains uncertain. Traders are advised to tread cautiously and manage risks given the heightened market volatility.
Disclaimer: The views expressed are personal opinions and do not amount to financial or investment advice.