Solana ($SOL ) has recently struggled to maintain upward momentum, failing to break through the $225 resistance level. After this unsuccessful attempt, the cryptocurrency experienced a notable decline, with its price dropping below $200. The price action is now showing bearish signals, leading analysts to question whether this is a temporary setback or a sign of a potential trend shift.

Price Action and Market Overview

Following a failed attempt to stay above the $220 mark against the US Dollar, Solana's price began a new downtrend. Currently, SOL is trading below both the $200 threshold and the 100-hour simple moving average (SMA). On the hourly chart for the SOL/USD pair (data sourced from Kraken), a bearish trend line has formed, with resistance observed at $204.

While there is potential for a price recovery, this would require a successful move above the $205 zone. Failure to surpass this resistance could further confirm the continuation of the downtrend.

Bearish Momentum and Key Levels to Watch

Solana's price faced challenges in breaking through the $220-$225 region, leading to a fresh decline similar to the downturn seen in other major cryptocurrencies like Bitcoin and Ethereum. The price subsequently fell below key support levels, including $212 and $205, before reaching a low of $196.73.

At present, SOL is consolidating below the 23.6% Fibonacci retracement level, which is based on the move from $223 to $196. The price is trading under both the $200 level and the 100-hour SMA, with a bearish trend line offering resistance around $204. If the bulls manage to push past the $205 level, there could be a potential for an uptrend, but the resistance at $204 and the 50% Fibonacci retracement levels at $210 and $213 will likely present challenges.

If the price manages to close above the $213 level, further gains may be expected, potentially pushing the price toward $225 and possibly even $240.

Outlook for Further Decline

Should Solana fail to break the $205 resistance, it may continue to face downward pressure. Immediate support levels are located at $196 and $188, with further downside risk if the price drops below $188. A breach of the $180 level could signal a deeper decline towards the $175 mark, and a decisive break below $175 might lead to a further move toward the $162 support level.

Technical Indicators

The MACD for SOL/USD is currently reflecting bearish momentum on the hourly chart, reinforcing the downward bias. Additionally, the RSI for SOL/USD is positioned below the 50 level, further indicating a bearish trend.

Key Support and Resistance Levels

Key Support Levels: $196, $188

Key Resistance Levels: $205, $210, $213

In summary, while there is still potential for an upward move if SOL can surpass key resistance levels, the prevailing bearish indicators suggest caution. Traders and investors should monitor these levels closely for signs of a trend reversal or further decline.

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