Solana (SOL) Under Siege: Can the $120 Support Hold Strong?

• Solana took a 4% hit and is trading around $125.
• SOL’s daily trading volume has surged by over 74%.

The 4% bearish pullback in the market has triggered the crypto assets to fall deeper to their recent lows. With the Fear and Greed Index value at 21, the broader sentiment remains in the fear zone, with the majority of the tokens charted in blood-red. Notably, Bitcoin (BTC) and Ethereum (ETH) hover on the downside. 

Meanwhile, Solana (SOL) has registered a loss of over 4.16%, and it has witnessed multiple rejections when attempting to escape the bear trap. As the negative outlook is strong, SOL has dropped to a low range of $124 from a high of $134.72. Only a steady bullish encounter helps the asset to recover faster. 

At the time of writing, Solana traded around the $125 zone, with its market cap reaching $71.03 billion. Besides, the daily trading volume has increased by over 74.65%, touching the $5.05 billion mark. As per Coinglass data, the market has experienced a 24-hour liquidation of $37.05 million worth of SOL. 

Is Solana at Risk of Another Pullback?

When both the Moving Average Convergence Divergence and the signal lines of Solana are seen below the zero line, it indicates stronger bearish momentum, which is prevailing. However, momentum may start shifting if the MACD crosses above the zero line. 

SOL chart (Source: TradingView)

Significantly, the Chaikin Money Flow indicator found at -0.13 suggests moderate capital outflows in the SOL market. The selling pressure is present, showing distribution rather than accumulation. For a renewed buying interest, the CMF needs to rise above zero.

With the current Solana price pattern, it might face a sharp pullback and test the support at the $120.36 range. An extended downside correction initiates the emergence of the death cross, and it could likely take the price to its former low below $115.21. 

Conversely, if the bulls reappear in the Solana market, the price could move up toward the nearest resistance of $130.57. Breaking beyond this level might push for the formation of a golden cross, supporting the recovery, driving the price to the $135.79 mark. 

Moreover, the daily Relative Strength Index (RSI) of SOL settled at 37.38, which implies weak momentum leaning bearish, and might hit the oversold territory. This level of the asset approaches a potential stabilisation zone. Solana’s Bull Bear Power (BBP) value at -6.44 signals strong bearish dominance. The sellers are firmly in control, with downside pressure surpassing buying strength. Also, it reflects aggressive distribution and not an immediate reversal.

Top Updated Crypto News

Crypto Liquidation Wipes Out $584M in Overleveraged Bull Bets