Solana Cryptocurrency Braces for Bearish Trend Amidst Death Cross Concerns
During the past year, Solana’s [SOL] price surged nearly sixfold, primarily fueled by airdrops and memecoin activities within the blockchain. However, this enthusiasm has waned significantly in recent months, with Solana-based tokens like dogwifhat [WIF] and Bonk [BONK] plummeting by 64% and 36% respectively since April. Solana itself has also faced challenges, experiencing a 31% decline over the same period.
On the SOL/USD 4-hour chart, SOL recently fell outside an ascending channel, indicating a weakening short-term price trend. Concerns are mounting as the price hovers near a potential “death cross” formation on the daily chart, where the 50-day Exponential Moving Average (EMA) is poised to cross below the 200-day EMA. This cross typically signals a bearish trend with possible downward momentum.
Potential for Price Recovery
While a confirmed death cross could lead to increased selling pressure and a bearish-neutral sentiment, a sudden bullish surge might thwart this scenario. Successful navigation above the $139 resistance level could prevent further declines and alter the current bearish trajectory.
Despite the prevailing uncertainty, some technical indicators suggest that Solana’s macro momentum remains intact. For instance, the Moving Average Convergence Divergence (MACD) recently formed a bullish crossover, indicating a positive trend.
Key Price Levels for SOL/USD
At the time of writing, Solana was trading at $131, struggling to establish $136 as a strong support level. The cryptocurrency’s failure to close convincingly above $140 and the ongoing battle with the $125 support level have kept the market on edge.
To reverse the current downtrend, SOL must surpass the supply zone between the 200-day EMA at $139 and the 50-day EMA at $141. According to analyst Dom, the failure to reclaim $140 promptly has raised concerns about potential further declines.
Overall, SOL’s ability to breach these resistance levels will be crucial in determining its future price action and sustaining any notable uptrend.