The price of SOL, the native cryptocurrency of the Solana blockchain, has shown a bearish trend as it struggles to break the $20 resistance against the US Dollar. Currently trading below $15, SOL below the 100 (4-hour) simple moving average. This article examines recent price movements, technical indicators, and potential support and resistance levels to comprehensively analyze the outlook for the SOL market.
Price Analysis and Bearish Trend:
On the 4-hour chart of the pair SOL/USD, a significant bearish trend line has formed, indicating resistance around $15.25. SOL’s decline started after hitting highs well above $20, as the bears gained momentum and pushed the price below the $17.50 support level. SOL is showing bearish signs below $15, following a similar pattern to Bitcoin and Ethereum. The price has bottomed out near $13.00, consolidating its losses.
Resistance Levels and Recovery Potential:
Immediate resistance for the SOL is near the $15 level and the previously mentioned trend line. Moreover, the trend line coincides with the 23.6% Fibonacci retracement level, which originated on the downside between the swing high at $22.32 and the low at $13.00. If SOL surpasses this level, the next important resistance is anticipated around the $16 zone. The main resistance lies near the $17.50 level, which aligns with the 50% Fibonacci retracement level. A break above this resistance could push the price towards the $18.80 resistance zone, with further advances targeting the $20 level.
Risk of Weakness and Level of Support:
If SOL fails to overcome the $17.50 resistance, it could experience further downward pressure. Initial support on the downside is expected near the $14.30 level. However, bears may strengthen if price breaks the key support level around $13.00. The price may decline towards the $12.00 support level in such a scenario. The next significant support level is located near $10.50.
The 4-hour MACD (Moving Average Convergence Divergence) for SOL/USD indicates diminishing bearish momentum, implying a potential slowdown in a downtrend. On the other hand, the 4hr RSI (Relative Strength Index) for SOL/USD is below the 50 level, indicating a bearish sentiment in the market.
The SOL price is currently showing bearish signs below $15, suggesting it is struggling to overcome the $20 resistance against the US Dollar. Despite the recent dip, the cryptocurrency has the potential to recover, provided it goes beyond key resistance levels, starting with $15 and its adjacent trend line. However, failure to break the $17.50 resistance level could lead to a further downside move. Traders should closely monitor the $14.30 and $13.00 support levels for potential buying opportunities or to assess the future direction of the market.