Solana’s price has recently tumbled to a 30-day low, reaching $139. This decline was attributed to a number of factors such as the launch of the Ethereum ETF by the United States Securities and Exchange Commission (SEC) in late May which diverted the attention of investors from other Layer-1 projects such as Solana.
Even with the efforts by Solana node validators to reduce the selling pressure, the US Federal Reserve maintaining a hawkish stance with no more rate cuts also played a role in the decline.
Solana’s Price Forecast and Market Positions
Following the decline, there are indications that Solana’s market sentiment may be on the path to recovery. The traders have set large long contracts with $120 million in long active contracts as against $109 million in short contracts.
This $10 million difference shows that bullish traders expect the market bottom and a subsequent rise in prices.
As per Coinglass’ Liquidation map, a critical resistance level has been observed at $150 with the short contracts worth $96 million. This could be a problem for the bulls, because if the price starts to get close to this level, a sharp sell-off could occur and hinder the rally. But if this resistance is broken down, a short squeeze could extremely push the price to $170.
Support Levels and Potential Rally Indicators
In the case of a prolonged market correction, the $130 level could be considered as a crucial support for Solana traders.
In the same way, technical analysis shows that such indicators as the TD Sequential signal points to a potential trend reversal, if the price gets supported by $141. Market analyst Ali Martinez noted that Solana had dropped to a low of $140, with $141 being a critical level of support.
If this support level remains intact, Solana could see an additional 1 to 4 more daily candlesticks in the candles indicating a bull run.
Memecoin Activity and Ecosystem Resilience
The Solana ecosystem has been stable to some extent, especially due to the activities associated with memecoins. Even though there were congestion issues in the earlier part of the year, Solana has been able to sustain demand through the tokens such as BONK and WIF.
Consequently, this memecoin activity has a positive impact on the overall demand for SOL and therefore, its potential for recovery. If this trend continues it could reinforce the bullish forecasts for Solana.
The next few days will be crucial for Solana as it tries to hold these support and resistance levels. If the price can manage a weekly close above $150 or $155 then the bear market structure can be ruled out and the price may range ahead before resuming the bull market.
