Solana (SOL) has lost 8% of its value in the past week and is facing significant selling pressure as it approaches critical support levels.
Amid the general downtrend in the cryptocurrency market, SOL’s current technical indicators point to a continuation of the downtrend, which calls for investors to remain cautious.
It is warned that further declines may occur if the level remains below $200, and it is emphasized that careful trading strategies should be implemented.
Solana’s recent performance shows that it has been trading within a clear downward channel since November 23. This channel has become a major factor influencing trader sentiment and market dynamics. The price has been facing sustained selling pressure since it reached around $218.76, forming lower highs and lows.
The bearish channel is formed by two parallel trend lines, with resistance at $230.17 and support at $200.60. The current price of SOL near these levels suggests that a test of psychological and technical support is imminent and suggests increased volatility. Furthermore, a break below the 20-day Exponential Moving Average (EMA) has raised concerns about strengthening downward momentum. The EMA is often used by traders to analyze short-term price trends and has become a key resistance level for SOL, currently at $227. This suggests that sellers are in control and the upside is being limited.
Market participants are watching closely as Solana approaches the $200.60 support level. A breakout of this level could send the price down to around $187, a price level that would correspond to early November.
Maintaining the $200 level is critical for SOL traders. Breaking below this level could create pessimism about the asset’s future performance. Traders should be prepared for the possibility that the downtrend will continue and increased selling pressure could push prices down further.
On the other hand, if the bulls continue to buy while holding this critical support, the focus could shift to a breakout above the 20-day EMA and the upper trendline at $230.17. Current price patterns suggest a rally to $264, which would signal a move towards new all-time highs.