Solana (SOL) is struggling to regain its historical highs, facing strong resistance. This struggle has allowed short sellers of Solana to push prices down, which currently hover around $238.
Currently, SOL holders may hope for a quick economic recovery, but the latest outlook analysis suggests this may not happen in the short term.
Solana has high liquidity but is at a low point.
The liquidation heat map is an indicator that suggests the price of SOL may be about to drop. The heat map predicts price levels where mass liquidations may occur and helps to understand high liquidity areas on the order book.
For example, if a certain area has a high liquidity concentration, the heat map color will change from purple to yellow. In most cases, this change in color indicates that the price of the cryptocurrency may move toward that area. Conversely, if the concentration is low, the color remains purple.
From a three-day time frame, the liquidation heat map shows high liquidity concentrated at $246. However, another level also remains at $225, which seems to be a support level. Due to low trading volume, short sellers of Solana may push the price of the altcoin toward or below this point.
Additionally, the daily SOL/USD chart shows that the Chaikin Money Flow (CMF) indicator has declined, which tracks the liquidity inflows and outflows of the cryptocurrency.
The rise in CMF indicates increased buying pressure, suggesting that prices may rise. Conversely, a decline in CMF reflects increased selling pressure and capital outflow, which typically indicates a price drop.
In the case of Solana, the decline in CMF aligns with the increase in selling pressure, which enhances the likelihood of further price declines, as previously emphasized.
Solana Chaikin Money Flow.
SOL Price Prediction: $300 is no longer the target.
Another assessment from the daily chart shows that the Balance of Power (BoP) has fallen into negative territory. BoP is a price-based indicator that compares the strength of bulls versus bears.
When the readings rise and are positive, it means the bulls are in control. However, in this case, it seems that short sellers of Solana are dominating. If this trend continues, the price of SOL may fall below $225.
If this continues, the Fibonacci retracement indicator suggests that altcoins may drop to the 23.6% level, around $222. In a highly bearish scenario, it could drop to $200.
Solana Daily Analysis.
However, if buying pressure increases, this scenario may not occur. In that case, the value of the altcoin could rise to $265.
