$SOL’s pullback from the $202 resistance has set the stage for bears to return to the market. SOL has faced strong bearish pressure towards the 200-DMA.
SOL’s extremely oversold condition has led to a short-term trend reversal on its chart.
The coin is once again approaching a key price level, but the current readings are not completely oversold.
Selling pressure has been present since SOL failed to break above the $202 resistance. The altcoin found support near $127 over the past three months, losing nearly 37% in value.
On the daily chart, SOL has formed a typical falling wedge pattern in this downtrend. The $127 to $131 range provided strong support and fueled the reversal, helping the cryptocurrency to achieve an upside breakout.
As a result, the bulls retested the $154 level after the breakout. However, the 20-EMA and 50-EMA continue to pose obstacles for recovery.
During this downturn, SOL fell to the 200-DMA. Nearly nine months later, the altcoin tested this level this past week.
It is worth mentioning here that the last time SOL fell below the 200 EMA was in January 2022. It remained below this level for about 1.5 years during this bearish rally.
At the time of writing, the 200 EMA is around $131. This level also coincides with the $127-131 support level, reaffirming the prospects of a near-term recovery from this range.
Going forward, SOL could range between $127 and $154. Therefore, traders could use the above-mentioned levels for a support or resistance flip. Any close above $154 could help buyers retest the $172 area.
Note that any close below the $127-$131 support range could put SOL in an extended downtrend and could trigger an oversold market condition.
