CoinWorld.com reports:
Over the past 24 hours, Solana has experienced a significant 7.76% retracement in price, falling below the key long-term support level of $139.50. This trend suggests that Solana may be preparing for further decline.
The recent drop is part of a 10.78% decline since last Thursday, coinciding with pullbacks in major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).
Despite a 15.77% drop this month, Solana boasts an impressive annual return of 595.28%, significantly outperforming other leading cryptocurrencies.
Furthermore, Solana’s trading volume has surged by 12.55% in the past 24 hours, reaching $30.2 billion, indicating increased trading activity and market interest.
Solana Breaks Long-Term Support – More Sell-Offs Ahead?
A closer look at Solana’s price chart reveals that the increase in trading volume may indicate further selling pressure.
The most noteworthy aspect is Solana’s price breaking below the key long-term support level of $139.50, suggesting a weakening position and a shift in market sentiment towards bearish.
Solana currently appears to be moving towards retesting the $135.65 resistance level (in red). Overcoming this resistance level could potentially drive a price reversal and reclaim the long-term support level.
Given Solana’s oversold condition, with the Relative Strength Index (RSI) (in purple) at 30, this assertion is reasonable. It suggests undervaluation of the asset, indicating a correction is due. However, the broader trend casts doubt on this outlook.
It is worth noting that the 30-day moving average (DMA) (in yellow) is sharply declining and has recently fallen below the 200-day DMA (in blue) in neutral territory.
This indicates strong bearish momentum in the short term, potentially transitioning the long-term trend from neutral to negative. Therefore, caution is advised as further downside may be ahead.
While this sets a negative precedent in the short term, long-term sustained growth may still depend on fundamental factors.
Of significance is the development of Solana spot exchange-traded funds (ETFs). VanEck, a pioneer issuer of Bitcoin ETFs, has applied to launch a Solana ETF.
This development could greatly enhance Solana’s adoption and investor confidence, affecting its long-term growth trajectory.
