Solana's (SOL) price has faced challenges in maintaining its upward momentum, especially after repeated attempts to secure $161 as a support level over the past two months. A recent failed breach of this level triggered a 13% decline in SOL's price, pushing it down to $139. As the cryptocurrency battles ongoing downward pressure, traders are left wondering if further declines are on the horizon.
Currently, the macro momentum for Solana indicates a bearish outlook, as reflected in key technical indicators. The Relative Strength Index (RSI) has fallen below the neutral line of 50.0, signaling increasing bearish momentum. RSI’s position in the bearish zone suggests that selling pressure has intensified, with little indication of a reversal in the near term.
Following Solana’s failed breach of the $161 resistance level, bearish sentiment has gained strength. With the RSI showing no signs of recovery, SOL appears set to face more downward pressure in the short term, potentially leading to further price declines.
Market sentiment around Solana has also shifted to the downside. Traders are positioning themselves to capitalize on a potential further decline by placing short contracts in the Futures market. These short contracts have now surpassed long contracts as traders look to profit from SOL’s falling price.
This sentiment shift is evidenced by Solana’s funding rate, which has turned negative for the first time in over two weeks. The negative funding rate indicates that the market is now predominantly bearish, with traders anticipating more losses in the near future.
Solana’s price is currently trading at $139, just below the local support level of $140. Considering the ongoing bearish momentum and negative market sentiment, a further drop to $124 is more likely. This level acted as support for SOL last month, with the cryptocurrency bouncing back from it previously.
However, if Solana fails to hold the $124 support level, a drop to $120 could follow, establishing the lower limit of the consolidation range beneath $161. This would indicate a further decline for the cryptocurrency, leaving it vulnerable to additional losses.
On a positive note, if Solana manages to flip $140 into a support level, it could have a chance to rise back toward the $160 range. Breaching the local resistance at $155 would invalidate the current bearish outlook, giving SOL a renewed opportunity to recover and potentially push higher in the weeks ahead.
