Solana's (SOL) effort to regain its record has faced stiff resistance. This fight has also allowed altcoin bears to drive down the price, which continues to hover around $238.
For now, SOL holders may be hoping for a quick recovery, but the latest analysis here suggests that may not be on the horizon.
High liquidity in low range for Solana
The liquidation heatmap is an indicator that suggests the SOL price may be poised for a decline. The heatmap predicts price levels where large liquidations may occur and helps you understand areas of high liquidity in order books.
For example, if there is a high concentration of liquidity in a specific area, the color of the heatmap changes from purple to yellow. This color change usually suggests that the price of the cryptocurrency may move towards that region. On the other hand, if the concentration is low, the color remains purple.
Looking at the three-day period, the liquidation heatmap shows a high concentration of liquidity at $246. However, another one is also holding at $225, which appears to be a support level. With low trading volume, Solana bears will likely push the altcoin’s price towards or below this point.
Solana Liquidation CalRO Map. Source: Coinglass
Additionally, the SOL/USD daily chart reveals a decline in the Chaikin Money Flow (CMF) indicator, which tracks the flow of liquidity in and out of a cryptocurrency.
A rising CMF indicates increasing buying pressure, suggesting a potential price increase. Conversely, a declining CMF reflects increasing selling pressure and capital outflows, which generally suggests a price decline.
In the case of Solana, the falling CMF aligns with growing selling pressure, reinforcing the likelihood of further price drops, as highlighted previously.
Chaikin Money Flow da Solana. Fonte: TradingView
Solana Price Prediction: $300 Is No Closer
Another assessment of the daily chart reveals that the Balance of Power (BoP) has fallen into the negative zone. BoP is a price-based indicator that compares the strength of bulls with that of bears.
When the reading rises and is positive, it means the bulls have the upper hand. But in this case, it looks like the Solana bears are in control. If this trend remains the same, then SOL price could fall below $225.
If sustained, the Fibonacci retracement indicator suggests that the altcoin could drop to the 23.6% level around $222. In a highly bearish scenario, it could decline to $200.
Solana Daily Analysis. Source: TradingView
However, if buying pressure increases, this may not happen. In this scenario, the altcoin’s value could rise to $265.
The article Solana (SOL) Bears Threaten $225 Support, Analysis Says appeared first on BeInCrypto.
