The current state of the Solana (SOL) market reveals a notable dip in price, with SOL now trading at $175.21, marking a 2.48% decline within the last 24 hours. This downturn in Solana’s market has been met by a recent sell-off, pushing the price down from its peak of $185 on April 8. However, despite this pullback, the broader context of Solana’s market structure could suggest a potential for recovery.

In the last three days, SOL’s price had been rallying, indicating a bullish sentiment following the positive non-farm payrolls report. Yet, the momentum could not be sustained, leading to a correction that saw SOL’s value momentarily dip below the $170 mark. This level is critical as it has acted as a strong psychological and technical support since late March.

Derivatives Market Signals and Open Interest Surge

While the spot market shows a retracement, the derivatives market for Solana tells a different story. A substantial increase of $150 million in open interest from April 5 to April 8 signals that traders may be positioning for a further price increase.

Solana (SOL) Open Interest vs. Price | Source: Santiment

The increase in open interest alongside a less pronounced rise in spot price could be indicative of new capital entering the Solana market. This divergence often signals an anticipated continuation of the upward trend, with investors positioning for expected gains. If the bullish outlook holds, Solana could retest the significant resistance level of $200, which it has previously breached but not maintained as support.

The recent price action has left SOL hovering between gains and losses, creating a sense of market uncertainty. As traders and investors monitor the influx of capital in the derivatives market, the question remains whether this could lead to a sustained price recovery for Solana.

However, should the current support levels fail to hold, we could see a bearish breakdown, possibly driving prices towards the next substantial support at around $162. On the upside, if SOL rebounds and surpasses the 20-day EMA, currently at $181, it might indicate that Solana could remain range-bound, with potential for an uptrend on a breakout above $205.

Solana’s Technical Terrain Shows Signs of Struggle Below $180.0

In recent trading sessions, Solana’s (SOL) journey has been marked by fluctuation and uncertainty, as seen on the 2-hour chart. Currently, SOL is trading at $175.21, demonstrating a marginal change from its opening price. The technical landscape presents a mixed view, with the Relative Strength Index (RSI) resting near the 50.02 mark. Solana’s  Price has not yet reached the oversold territory, with more room for upward potential.

The Moving Average Convergence Divergence (MACD) sits just below the signal line, hinting at a bearish bias. However, the lack of significant divergence keeps the door open for potential shifts in momentum. Solana’s price has been testing the Fibonacci retracement level of 0.618, a critical juncture that could determine the next directional move. If SOL can hold above this level, bulls may look to propel the price toward the next resistance near $180. Conversely, a break below could see the price target support levels around $170.

Market Sentiment Reflects in Solana’s Price Swings

Price action on the SOL/USD pair has been somewhat tentative, with the cryptocurrency grappling to maintain upward momentum. The recent downward tick to $175.23, just slightly lower than the 0.618 Fibonacci retracement level, signals a precarious position for SOL. If the bulls can amass enough strength to rally, the first significant resistance to overcome lies at $180, as highlighted by the recent price peaks.

Should the market sentiment shift and bearish pressure intensify, SOL might slide towards the 0.786 Fibonacci level around $173.50, a region that may act as a temporary cushion. Observing the broader price movement, the narrative unfolds with Solana trading within a range, signaling a market in search of direction amidst varying trader sentiments. The interplay between the RSI and MACD on the 2-hour chart will be crucial in forecasting whether Solana’s price can reclaim lost ground.