The crypto market experienced significant volatility and bearish market dynamics and pressure this week, with Bitcoin’s price correction to $56,000 on Wednesday, May, triggering a major sell-off that impacted most top altcoins, including Solana (SOL). SOL recorded over 10% intraday loss amid the bearish pressure. However, the layer 1 cryptocurrency has since regained its ground, currently trading at $129.83 and reflecting a 3.22% gain in the last 24 hours.
SOL Price Chart: CoinMarketCap
This upswing has helped wipe out SOL’s previously heavy bearish trend, with the token now remaining with a 12.29% deficit over the last 7 days and a heavy 29.49% deficit within the last 30 days as of writing. April proved a challenging month for Solana, as market uncertainty strengthened due to the Bitcoin halving event. This bearish downturn plummeted SOL value from $204 to the current trading price of around $129, equating to a 36.7% loss.
While Solana has fought back from April’s slump, the Solana ecosystem has drawn scrutiny this week due to the questionable “Bonk Killer” memecoin. Launched on April 29th, this obscure Solana-based token has allegedly become the world’s largest market cap asset despite having just over 1,000 holders. The catch? Bonk Killer appears to be a honeypot scam, with the developer activating the “freeze authority” to prevent token transfers after the initial buying frenzy. Statistics reveal that over 90% of Bonk Killer tokens are held by the creator’s wallet.
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SOL Technical Analysis
In the weekly chart, SOL has experienced four consecutive weeks of bearish weekly candles after rejection at the $209 resistance level in early April. Price found double support at the $125 zone on April 13th after a breakdown of the ranging channel. Price corrected upwards thereafter before the continuation of the bearish run. This week, SOL has broken down from an ascending trendline to retest the $125 horizontal support.
SOLUSD Weekly Chart: TradingView
The daily timeframe shows SOL breaking down from an ascending trendline on April 30th to close the month bearishly. On May 1st, trading saw a retest and rejection of that trendline resistance, with SOL trading between a $134.89 high and a $128.57 low today, continuing its bearish trend. The RSI reading of 37 and horizontal support at $120 present a key level to watch for potential support against further declines.
SOLUSD Daily Chart: TradingView
On the 4-hour chart, the retest of the broken ascending trendline is clear, suggesting SOL will likely test the $120 support before establishing a firm directional bias. A breakdown below $120 could precipitate an extended correction towards $98.46 low.
SOLUSD 4-HourChart: TradingView
In the long run, SOL is well-positioned to achieve new all-time high prices. Despite the recent market volatility and the bearish downturn in April, SOL has previously demonstrated incredible stability, recovering its losses and maintaining its bullish trajectory. With its strong layer 1 blockchain infrastructure, growing ecosystem of decentralized applications and a dedicated community of developers and users, Solana is poised to cement its position as a leading force in the crypto landscape, driving SOL to new record heights in the future.
