The cryptocurrency market has started the week on a bearish note, significantly impacting major tokens, including Solana. The price of Bitcoin has failed to sustain above the $66,000 mark, leading to a broader correction across the market. Solana (SOL) has been particularly affected, slipping to $127.95, the lowest price since early May 2024. This drop marks a significant decrease of 7.5% within the last 24 hours, with a notable trading volume increase of +153.44%.
Solana Struggles below $130.0, EMA Levels Signal Mixed Sentiment
Solana’s price action has been consistently bearish, forming a descending channel pattern on the daily timeframe. This pattern has persisted for about a month, with SOL trading within this range and testing its support trendline. The token’s market capitalization has also seen a significant drop, losing approximately $20 billion and falling to the 5th position in the cryptocurrency rankings. This reduction has created a $24 billion gap from Binance Coin (BNB), which now holds the 4th spot.
The bearish sentiment is further amplified by the technical indicators whereby a descending channel has formed. The formation of this pattern suggests that Solana may continue testing its support level. A breakdown below $127 could see the price revisiting lower levels around $100.The high trading volume of $437,910,797 reflects significant selling pressure, contributing to the downward trend.
The Relative Strength Index (RSI) is not mentioned, but typically, an RSI at 32 indicates oversold conditions, which might lead to a potential bounce if buying pressure emerges. The potential scenarios for SOL suggest that: If SOL maintains its support at $127, it may regain bullish momentum, targeting the resistance at $155.However, a breakout Potential: A breakout above the resistance trendline could push the price toward $181.50, signaling a reversal.
In a bearish scenario, in case of continued selling pressure, SOL might breach the $127 support, testing lower levels at $100 in the coming weeks. The bearish trend is supported by the MACD’s red histogram and the descending channel pattern.
Amidst this downturn, the Solana network has been grappling with issues related to Sandwich attacks, where bots exploit front-running exploits. These attacks have led to significant financial losses for retail traders, with over 150k SOL siphoned off last month. The Solana Foundation has responded by expelling rogue validators involved in these activities. Discussions are ongoing about revamping the protocol design to mitigate such exploits and enhance security.
