Solana price seeks a daily close above $140 support/resistance after recoiling from $120 weekly support area amid the crypto market sell-off.
STORY HIGHLIGHTS
Solana has the potential to return above $200 after Bitcoin halving.
Market doldrums may hinder an immediate upswing to $200, due to resistance at $150.
The slump in the Defi TVL to $3.55 billion in April reduces investor confidence in SOL’s bullish outlook.
Solana price took a massive tumble last week as Bitcoin nosedived to $61,000 caught in the rising geopolitical tensions between Israel and Iran. Globally, risk assets turned red, with SOL sliding to $120 on Saturday.
The widespread selling pressure and instability spilled into the new week, holding SOL hostage between support at $120 and acute resistance at $120.
The competitive smart contracts token boasting $62 billion in market cap and ranking #5 among other cryptos had recovered to $141 on Thursday while showing signs of an incoming trend reversal.
Solana Price Ignites Bullish Momentum
Traders are ready to get back in the game, considering a 4% surge in the trading volume to $5 billion on CoinMarketCap. The sudden interest in SOL longs underscores a modest 7.25% increase in value, thanks to the robust support by the ascending trendline.
The following few days will be essential to Solana and may determine whether the $200 is within reach, or traders should prepare for doldrums between support at $120 and resistance at $150.
Select technical indicators like the Moving Average Convergence Divergence (MACD) hint at a difficult recovery journey, mirroring a sell signal on the daily chart.
If the Relative Strength Index (RSI) sustains the uptick from near oversold conditions, Solana price could gain momentum and close the gap to $200.
Solana’s position below two key moving averages; the 50-day Exponential Moving Average (EMA) and the 20-day EMA (the red and blue lines on the chart), implies that bulls may be disadvantaged at the moment.
It also means that Solana price will require an extra push to validate the long-term bullish thesis to $200.
With support at $140 still, unconfirmed, further losses cannot be ruled out, hence the importance of investors preparing to dollar cost average (DCA) if the price plunges below the trend line. The key support areas to keep in mind in this case are $130, $120, and the 200-day EMA (purple line at $107).
On the decentralized finance (DeFi) front, Solana continues to witness declining total value-locked (TVL) volumes. According to monitoring platforms like Defi Llama, a recent peak of $4.89 billion — the value of SOL in various smart contacts protocols within the ecosystem has dropped to $3.55 billion.
The downtrend in the TVL signals falling confidence among investors in the future value of Solana. In other words, they are pulling their holdings from staking contracts in readiness to sell, which emphasizes the recent drop to $120.
