Solana (SOL) Buyers Retreat as Coin Dips Below Major Support Level

Solana’s price has sharply declined since it reached an all-time high of $295.83 on January 18. At press time, SOL trades at $171.81, plummeting 41% since then.

The altcoin, which had been trading within an ascending parallel since 2023, has now dipped below the lower line of the channel. This signals a decisive shift in market trends and hints at a further price decline.

Bears Take Control as Solana Breaks Its Multi-Year-Long Channel

Solana had traded within an ascending parallel channel since June 2023 and has now broken below it for the first time in the past year. 

Solana Ascending Parallel Channel. Source: TradingView

The channel is formed when an asset’s price moves between two upward-sloping parallel trendlines. It indicates a sustained bullish trend with higher highs and higher lows. The upper line acts as resistance, while the lower line serves as support.

As with SOL, when the price falls below the lower line, it signals a break in the uptrend and suggests that selling pressure has overwhelmed the buyers’ strength. This breakdown indicates bearish dominance in the SOL market, indicating further declines as traders exit long positions.

In addition, the coin has recorded negative Elder-Ray Indexes since January 27, confirming the strengthening bearish bias against SOL. At press time, this is at -30.4. 

Solana Elder-Ray Index. Source: TradingView

The indicator measures the strength of bulls and bears in the market. When the index is negative, bear power dominates the market, signaling strong selling pressure and potential further price decline.

SOL Eyes $136 Amid Weak Buying Pressure

According to its Fibonacci Retracement tool, SOL’s price risks falling to $136.62 if buying pressure wanes further. If the bulls fail to defend this support level, the coin’s price could dip to $120.72, a low it last reached in September.

Solana Price Analysis. Source: TradingView

However, a resurgence in the demand for SOL will invalidate this bearish outlook. In that scenario, its price could attempt a retest of its breakout line. A successful retest could propel its price above the lower line of the ascending parallel channel and toward $220.58.

The post Solana (SOL) Buyers Retreat as Coin Dips Below Major Support Level appeared first on BeInCrypto.