Solana Down 8%, Approaching $200 Support$SOL
Solana (SOL) has been experiencing a steady price decline over the past few weeks, stemming from the pullback in the broader cryptocurrency market. Currently trading at $218.76, SOL is down 8% over the past seven days.
Due to the current low buying interest and ongoing selling pressure, SOL price could slide below the critical $200 support in the near term. This analysis explains why this possibility is possible.
On the daily charts, Solana price has been trading inside a downtrend channel since November 23. This channel is a structure that reflects a downtrend, where the price is squeezed between two parallel downward sloping trend lines. The price is making lower highs and lows, indicating increasing selling pressure.
The upper line of this channel is the resistance level, while the lower line is the support level. For SOL, the resistance level is $230.17, while the support level is $200.60. Also, the value of SOL has fallen below the 20-day Exponential Moving Average (EMA) in the last few weeks. This EMA is an indicator that measures the average price of the last 20 days, giving more weight to new prices.
A drop below the 20-day EMA typically indicates that a downtrend has begun and that sellers are in control of the market. Any attempt to break above this level is met by sellers, creating a significant resistance area at $227. SOL has struggled to break above this level over the last six days. The increased selling pressure could push the price towards the $200.60 support. If the bulls fail to defend this area, SOL could drop to $187, a level not seen since early November.
However, if buying demand picks up, SOL price could surpass the 20-day EMA resistance at $227 and move towards the all-time high of $264, above the upper boundary of the falling channel.
