The cryptocurrency market is witnessing a sharp downturn, with major indices like the S&P 500 dropping nearly 3% in recent days. Solana (SOL), which was already struggling under increased selling pressure, has now dipped below the $140 mark. With bearish momentum accelerating, analysts suggest that the next key support level could be around $122. This raises a crucial question for investors: Is this a buying opportunity, or is Solana headed for a deeper correction?
Growing Concerns Over Solana’s Future
Solana’s recent downturn can be attributed to several factors. One of the biggest concerns is the growing number of rug pulls involving memecoins on the Solana blockchain, which has significantly dented investor confidence. Furthermore, Binance, one of the world’s largest crypto exchanges, recently liquidated a substantial amount of SOL through its market maker, Wintermute. This has intensified bearish sentiment, with some speculating that Binance might be offloading its holdings in anticipation of lower prices.
At present, SOL is facing heavy resistance, with market indicators suggesting further downside potential. If selling pressure continues to mount, the price could breach the $120 support zone, potentially setting the stage for a larger drop toward $100.
Can Solana Recover?
Solana’s price has now retraced to levels last seen in October 2024, testing a crucial support range between $136.5 and $133.6. While this zone has historically provided a strong base, the current market structure suggests it may not hold this time.
Technical indicators paint a grim picture. The Relative Strength Index (RSI) has reached its lowest levels since June 2023, indicating oversold conditions. Additionally, the Moving Average Convergence Divergence (MACD) has signaled its most bearish trend since 2022, further reinforcing the downward momentum. The On-Balance Volume (OBV) has also been steadily declining since the start of the month, reflecting weakening market sentiment.
Also Read: Binance’s Massive Solana Sell-Off: Market Shake-Up or Insider Warning?
With SOL facing strong downward pressure and market indicators signaling further declines, the coming days will be critical for its price action. If Solana fails to defend its $119 support level, a slide toward $100 could become inevitable. Traders should remain cautious and closely monitor key support and resistance levels before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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