Solana’s SOL token price is grappling with persistent bearish momentum, raising concerns about the sustainability of its key support level at $132. The token has been heavily sold, triggering severe price drops and waning buyer interest, as shown by its technical analysis and on-chain metrics.
Solana’s CMF Indicator Signals Waning Buyer Interest
The Chaikin Money Flow (CMF) indicator on Solana’s daily chart has been oscillating in the negative region for the past week, signalling persistent selling pressure. Such trends raise doubts about Solana’s ability to maintain its multi-month support level at $132, as there has been low buying activity.
Adding to the bearish sentiment, Solana’s Relative Strength Index (RSI) has been trending lower, indicating that bears are currently in control. Positioned at 39.13 at press time, the RSI clearly indicates the SOL token is in oversold conditions. Despite this, the RSI has been forming lower lows, reinforcing the dominance of sellers in the market.
However, there is a glimmer of hope as the RSI recently shifted momentum to the upside, implying a potential bullish crossover in the near term. This shift, coupled with two consecutive green candles on the four-hour chart, suggests SOL might witness a short-term bounce from the $132 support level.
SOL Price: On-Chain Metrics Paint a Positive Picture
While Solana’s price action remains under pressure, the network’s on-chain metrics are more optimistic. According to data from Santiment, Solana has experienced the highest month-on-month rise in total development activity, with a 33.42% increase.
This surge in development activity is a strong indicator of the network’s ongoing growth and potential long-term strength despite the current price headwinds. Moreover, data from DeFiLlama reveals that Solana’s Total Value Locked (TVL) has increased by over $1 billion in the past month.
This rise in TVL suggests that the network continues to attract substantial capital inflows despite the bearish price action. However, these positive on-chain metrics have yet to translate into bullish price action, as market participants remain cautious.
Key Resistance Levels to Watch
As Solana tries to bounce back from its recent lows, it confronts key resistance levels that could shape its next move. The first hurdle is at the 0.382 Fibonacci level, near $140.80. Clearing this barrier might pave the way for Solana to challenge its next critical resistance at $151.95.
Overcoming $151.95 is vital for Solana to signal a potential uptrend. If successful, the next target would be $163.99. Yet, failure to break through these levels could see Solana stuck in a consolidation phase, awaiting its next direction.
Meanwhile, as Solana aims to test its $132 support, the market focuses on whether buyer interest will return. A strong defense of this support could spark a short-term bullish reversal, but Solana may face more profound losses if the support gives way.
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