$BNB $SOL Solana (SOL) has faced significant volatility recently, with a sharp decline of about 10% over the last 24 hours amidst widespread market liquidations. As the cryptocurrency market struggles, with liquidations reaching a staggering $528 million, Solana has dropped to approximately $176.3. With Bitcoin's price tumbling below $92,000, the question arises: can Solana reclaim $200, or will it continue its descent to $155?
Technical Analysis: A Bearish Breakdown or Bullish Reversal?
On the daily chart, Solana’s price action has broken a key support trend line, signaling a bearish breakdown of a rising wedge pattern. This was highlighted by a bearish engulfing candle, which caused a 6.35% drop. Currently, SOL is testing the critical support zone around $175, and it has fallen below the 200 EMA, signaling potential further weakness. Additionally, the 20-day and 50-day EMAs are showing a bearish crossover, providing further selling signals.
However, the daily RSI shows a potential bullish divergence, suggesting that a reversal may be on the horizon if Solana manages to hold the $175 support and closes above the 200 EMA. If the bulls can regain control and push the price above this level, a retest of the $200 resistance could be possible. On the other hand, a sustained bearish trend could bring Solana down to the next support at $155.
Market Sentiment and Derivatives Analysis
As the broader market faces growing bearish pressure, Solana's derivatives indicate a prolonged correction. The open interest in Solana futures has decreased, now standing at $5.9 billion, down 6.07% from its peak. Additionally, the long-to-short ratio has dropped, pointing to a predominance of bearish positions. Liquidations of Solana positions have surged to $16.69 million in the last 24 hours, with long positions suffering the most.
Crypto analyst Ali Martinez suggests that Solana's recent drop marks the breakdown of a symmetrical triangle pattern on the 4-hour chart. This breakdown suggests a potential downside of up to 40%, with a target price of $155 if the bearish trend continues. However, if the price can reverse and break above the $183 resistance, there is still potential for a bullish rally.
Conclusion: Will Solana Reclaim $200 or Continue Its Decline?
The path forward for Solana is uncertain, with both bullish and bearish scenarios in play. If the $175 support holds and the market sentiment improves, Solana could see a recovery toward $200. However, a failure to regain momentum could lead to further declines, potentially reaching the $155 support level. As always, traders should stay alert to market shifts and exercise caution in these volatile conditions.
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