Solana's (SOL) efforts to reclaim its historical peak have faced strong resistance. This confrontation has also allowed the Solana bears to push the price down as it continues to hover around the $238 mark.
Currently, SOL investors may hope for a quick recovery, but the latest forecasts suggest that this may not happen anytime soon.
High Liquidity in Low Zone for Solana
The liquidity heat map is an indicator suggesting that the price of SOL may be adjusted downwards. The heat map predicts significant price levels where liquidity may occur and aids in understanding high liquidity areas on the order book.
For example, if there is a large concentration of liquidity in a certain area, the colors on the heat map will change from purple to yellow. In most cases, this suggests that the price of the Cryptocurrency may move towards that area. Conversely, if the concentration is low, the color will remain purple.
Looking at the three-day time frame, the liquidity heat map indicates that there is a high concentration of liquidity at the $246 level. However, another concentration also appears at $225, seemingly acting as a support level. With low trading volume, it is likely that the Solana bears will push the price of this altcoin down or below this level.
Solana liquidity heat map. Source: Coinglass
Additionally, the daily SOL/USD chart shows a decline in the Chaikin Money Flow (CMF) indicator, which tracks the inflow and outflow of liquidity for a Cryptocurrency.
An improved CMF indicator indicates increasing buying pressure, suggesting a potential price increase. Conversely, a declining CMF reflects increasing selling pressure and capital outflow, which often suggests a price decrease.
In Solana's case, the declining CMF aligns with increasing selling pressure, reinforcing the likelihood of continued price decreases, as previously emphasized.
Solana Chaikin Money Flow. Source: TradingView
SOL Price Forecast: $300 Not Close Anymore
Another assessment of the daily chart shows that the Balance of Power (BoP) indicator has fallen into negative territory. BoP is a price-based indicator that compares the strength of the bulls and bears.
When this indicator rises and is positive, it means the bulls are in control. But in this case, it seems that the Solana bears are in control. If this trend continues, the price of SOL could drop below $225.
If maintained, the Fibonacci retracement indicator shows that this altcoin could drop to the 23.6% level around $222. In an extremely negative scenario, it could fall to $200.
Daily analysis of Solana. Source: TradingView
However, if buying pressure increases, that may not happen. In that scenario, the altcoin's value could rise to $265.
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