Solana's native token SOL has experienced a sharp 20% decline over the past week, pushing its market capitalization down to $85 billion amid heavy selling pressure across crypto markets.
Technical analysis indicates SOL is caught in a strong downward trend, with the cryptocurrency trading well below key price levels. The Ichimoku Cloud, a popular technical indicator, shows an expanding bearish pattern with SOL price trapped under the cloud formation, suggesting continued downside momentum.
The bearish outlook is further reinforced by the Directional Movement Index (DMI), which currently sits at 38.4 - indicating a robust trending market. The negative directional indicator has surged from 26 to 38.3, while the positive indicator has dropped from 20.5 to 11.3, painting a clear picture of mounting selling pressure.
Market analysts point to several critical price levels ahead. SOL faces immediate support at $159, followed by $147. If these levels fail to hold, prices could slide further to $133, marking a 22.6% drop from current levels.
However, bulls haven't completely lost hope. A recovery scenario could see SOL challenging resistance at $183, with potential for an extended bounce toward the $203 level if buying momentum returns. For now, the immediate outlook remains bearish as sellers maintain control of price action.
The recent price action highlights the volatile nature of cryptocurrency markets, with SOL joining other major digital assets in significant price corrections. Traders and investors are closely monitoring technical indicators for any signs of trend reversal in the coming days.
This article is for informational purposes only and should not be considered financial advice. Cryptocurrency markets are subject to high volatility and risk.