Since the downtrend began on May 21, Solana (SOL) has experienced an 18% decline in value, leading to the formation of a descending channel. This pattern is generally considered bearish and indicates sustained selling pressure. The channel’s upper line acts as resistance, while the lower line represents support. Currently, SOL is trending toward support at $139.54.
When an asset approaches a historical support level, bulls often step in to defend it. If the support level at $139.54 holds, SOL’s price could potentially rebound toward the upper resistance line of the descending channel. However, if the support line is breached, the bearish trend is likely to continue, leading to further declines in SOL’s value.
The sentiment surrounding SOL has been predominantly bearish. Since June 1, the weighted sentiment has remained negative, currently at -0.28. This negative sentiment suggests a significant bias against the asset. Furthermore, the declining futures open interest, currently at $2.12 billion, has decreased by 18% over the past ten days. This decline indicates that more traders are closing their positions without opening new ones, reflecting a lack of confidence in price recovery.
Momentum Indicators
Key momentum indicators for SOL also point to increased selling pressure:
– Relative Strength Index (RSI): At 41.07, the RSI indicates low buying activity, hovering near the oversold threshold but not signaling a clear buying opportunity yet.
– Money Flow Index (MFI): Also at 41.07, the MFI echoes the RSI, suggesting low buying momentum.
– Elder-Ray Index: With a value of -9.8, the Elder-Ray Index shows dominant bear power in the market.
Price Prediction: $139.54 Support Critical
For SOL to avoid further declines, selling pressure must be kept at bay. If bearish sentiment continues and the support at $139.54 is breached, SOL could experience a further drop. However, should the bulls manage to defend this support, a potential rebound toward the upper resistance line of the descending channel could occur.
