The price of Solana (SOL) has dropped sharply, losing nearly 11% in the past seven days after failing to break the resistance level of 220 USD. Following that rejection, SOL fell below the important threshold of 200 USD, reflecting increasing bearish momentum.
Despite this decline, whale activity shows signs of new accumulation, with large investors gradually increasing their positions over the past five days. These developments suggest the potential for price recovery, although SOL's immediate outlook remains under bearish pressure.
SOL whales continue to accumulate
The number of addresses holding at least 10K SOL has sharply decreased from 5,096 to 5,025 between December 28 and January 2, reflecting significant sell-offs by large investors during this time. Tracking these whales is crucial as their buying and selling activities often have a substantial impact on the market.
When whales reduce their holdings, it can be a sign of lack of confidence or profit-taking, leading to increased selling pressure and the potential for bearish movement.
Number of Addresses with at least 10,000 SOL. Source: Glassnode.
However, the number of whale addresses has started to recover, increasing from 5,025 on January 2 to 5,098 on January 8. This recovery suggests new accumulation by large investors, which could be a positive sign for the stability or price recovery of Solana in the near future.
Although SOL is in a downtrend and has lost 14% in the past two days, increased whale activity could signal an improvement in sentiment and may lay the groundwork for a price reversal if this trend continues. These movements often reflect a change in confidence that could support SOL's price in the medium term.
Solana's DMI index indicates that sellers are in complete control.
The average directional index (ADX) for SOL is currently at 42.6, up from 37 just one day earlier, indicating that the trend is strengthening. ADX measures trend strength on a scale from 0 to 100, regardless of direction, with values above 25 indicating a strong trend and below 20 reflecting weak or no momentum.
This increase in ADX confirms that SOL's current downtrend is intensifying, suggesting that bearish momentum is prevailing in the market.
SOL DMI. Source: TradingView
Additionally, directional indicators show that +DI, representing buying pressure, has significantly decreased to 10.1 from 31.5 over the past three days, indicating a marked decline in buying activity. Conversely, -DI, which tracks selling pressure, has surged to 33.1 from 8.6 during the same period, indicating a significant increase in bearish momentum.
These changes reinforce the current bearish trend and suggest that the price of Solana may face continued selling pressure unless buying activity is significantly ramped up to counter the negative sentiment.
SOL Price Prediction: Is a recovery of the 200 USD level possible?
Solana's EMA line indicates a bearish outlook, with short-term EMA lines crossing below all long-term lines just one day prior. This death cross is a significant bearish signal, coinciding with a sharp price drop from 200 USD.
If the current downtrend continues, the price of SOL could test the important support level at 185 USD. If this level is not held, the price could drop further to the next key level at 176 USD.
SOL Price Analysis. Source: TradingView
However, recent whale activity brings a bit of optimism, as large investors have continuously accumulated SOL over the past few days. This accumulation may be a sign of increasing confidence among large investors, potentially setting the stage for a reversal.
If bullish momentum returns, SOL's price could challenge the resistance level at 197 USD. A breakthrough above this level could open up opportunities to reach 211 USD, representing a 12.8% recovery from current levels.
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