Solana (SOL) has slipped below the $130 mark, marking a 20% decline over the past 11 days. With the current price at $127, the $125 support zone is under significant pressure. This crucial level has acted as a stronghold for bulls in the past.
The recent price action hints at deeper troubles. A death cross between the 50-day and 200-day EMAs looms, signaling a potential breakdown rally. The daily RSI also reflects a glimmer of hope, showing a bullish divergence that hints at a possible double-bottom reversal. Yet, the pattern of lower highs suggests strong overhead resistance.
The broader market downturn has coincided with a sharp drop in Solana’s active addresses. From a peak of 33.15 million in July, active addresses have plummeted to just 11.1 million in August. Daily active addresses also fell below 1 million, reflecting waning interest and activity on the network.
This decline in user engagement could foreshadow further price erosion. If the $125 level fails to hold, SOL could slide to the next significant support levels at $110 and $100. These zones have provided strong support in the past, offering multiple reversal points earlier in 2024.
For a bullish scenario to play out, SOL must reclaim its 200-day EMA at $140 and its 50-day EMA at $147. A breakout above $163, the peak of the previous double-top formations, would signal a potential trend reversal. However, the market’s current trajectory remains bearish.
Adding to the concerns is the steady offloading by Solana whales. A major holder has sold 695,000 SOL since January, valued at $99.5 million. Despite this, the whale still holds 1.88 million SOL, worth approximately $255.89 million, which remains staked. This ongoing liquidation suggests further downside risk.
Solana Faces Critical $55 Reversal Amid Persistent Resistance
Solana (SOL) has struggled to break above its bull market support band, raising fears of further declines. Market analyst Benjamin Cowen highlights this critical resistance, defined by the 20- and 21-week EMAs, as a key barrier SOL has failed to surpass.
Currently priced at $129, SOL has faced repeated rejections, most notably near $190 in July. This persistent resistance hints at a potential reversal, with the rising wedge pattern on Cowen’s chart signaling a possible drop to the $55 level.
Adding to the pressure, Solana’s development activity has declined, and major whales have been offloading their holdings. One significant whale sold 695,000 SOL in 2024, contributing to the downward trend. Despite this, they still hold 1.88 million SOL, valued at $255.89 million.
The combination of technical resistance, decreased development, and whale selling suggests SOL may continue its downward trajectory unless market conditions improve.
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