Solana’s Approach to Avoiding a Repetition of the 2022 Crash
As of the present moment, Solana [SOL] is currently testing the crucial price point of $139, which serves as its aggregated cost base. This particular level has historically held significant importance. Back in 2022, Solana traded in the vicinity of this threshold for a span of five months before eventually dipping below it.
This breach led to an extensive downward trend that was only reversed in October 2023.
Now, as Solana retraces its steps to this key level, analysts are closely monitoring whether it can sustain its position above $139 or if there is a likelihood of a recurring downward trend.
Failure to maintain support above this level could potentially indicate further market corrections, while a successful hold could herald the possibility of future growth.
SOL and the Vital $139 Benchmark
Solana’s aggregated cost base of $139 is more than just a figurative hurdle—it has historically proven to be a critical level for signaling shifts in trends.
In 2022, SOL lingered near this figure for five months, facing challenges in maintaining stability before finally dipping below, thus commencing a prolonged downtrend that only saw a reversal in October 2023.
Data from Glassnode emphasizes this pattern: prolonged dips beneath this threshold have previously instigated extended bearish periods, whereas recoveries above it have resulted in robust rallies.
If SOL can effectively secure a position above $139, it could set the stage for accumulation and upward movement in the market.
Scenario if SOL Drops Below $139 Again
If SOL breaches the $139 mark, historical trends indicate an increased risk of prolonged bearish momentum. The breakdown below this price level in 2022 led to a substantial correction lasting nearly a year until Solana regained its strength.
The realized price indicator also indicates that movements below $139 have historically aligned with extended consolidation phases or lower re-accumulation ranges.
In the event of SOL dropping below $139 again, critical downside targets could emerge around $100 and $125—levels at which prior buying activity resurfaced towards the end of 2023. A sustained dip below $139 might also dampen investor confidence, potentially triggering cascading liquidations.
To prevent a reoccurrence of the 2022 downtrend, aggressive bullish activity is crucial at this critical support level for Solana.
Will SOL Find Stability or Face Further Declines?
Solana has already dipped below $139, currently trading at $131.54, which raises concerns about possible further downturns. Technical indicators imply weakness, with the RSI sitting at 24.98, deep within the oversold territory.
While this could suggest a brief respite in the short term, it also indicates significant bearish pressure.
Furthermore, the 50-day and 200-day SMAs at $201.55 and $183.94 indicate that SOL is trading well below crucial trend indicators, reinforcing a long-term bearish sentiment.
A failure to reclaim $139 promptly might pave the way for additional declines, with $125 and $100 serving as potential support levels. Nevertheless, increased buying volume at these levels could potentially trigger a recovery for SOL. As of now, market sentiment remains delicate, and the bulls are facing a challenging road ahead.