Solana Price Analysis: SOL Dips Below $110 As Bearish Trends Emerge, What Comes Next?

21.02.2024

Solana price analysis: SOL has been bullish throughout the previous month, signaling optimism in the market as 2024 progresses. Despite this upward trend, the cryptocurrency experienced a notable dip on the last day. The Altcoin broke below the $110 support level. At the time of writing, Solana price is trading at $107, with a notable decrease of 6% in the past 24-hours.

Solana Price Analysis: A Sudden Drop Below Key Support

With its market cap now at around $39 billion, Solana is ranked as the fifth-largest digital currency on CoinMarketCap. A surge in trading volume by 33.34% to $2.51 billion in the past 24 hours suggests a growing interest among traders. In the recent week, the price of Solana has oscillated between $113 and $107. This indicates a sideways movement confined within increasingly tight trendlines.

Solana price analysis

The recent downturn can be attributed to a mix of factors, including potential buyer fatigue and a lack of enthusiasm among sellers to cash out, keeping the price within a specific range above the pivotal support level. This consolidation phase follows a short price increase period, hinting at a cautious market sentiment.

Solana experienced a substantial surge in its value during the final months of 2023, leading to a period of inactivity among investors as the new year began. Despite an initial uptick, the token struggled to break past its recent peak levels, resulting in a noticeable decline. This downturn has brought the token’s value perilously close to crucial support levels, raising concerns about potential losses if these levels are not maintained.

The Impact of Solana’s Partnership with Filecoin

Solana has partnered with Filecoin, significantly departing from centralized data storage methods. This collaboration is aimed at bolstering the Solana blockchain’s reliability and scalability. By incorporating Filecoin, Solana is enhancing the accessibility and utility of its block history for a wide range of users, including infrastructure providers, explorers, and indexers.

This strategic move leverages Filecoin’s decentralized storage to offer data redundancy, scalability, and improved security, reinforcing Solana’s commitment to decentralization. The partnership between Solana and Filecoin exemplifies the strength of combining blockchain technologies to build more durable and efficient systems for users and developers alike.

Solana Price Analysis Daily Technicals Indicators

If the current decline in Solana’s value continues, the price may drop to a support area between $106 and $100. Conversely, a resurgence of bullish momentum could propel the SOL price past the $115 threshold, setting the stage for an ascent to the $120 resistance level. A sustained positive trend could even see the price testing the more formidable $130 resistance mark.

The SOL price is currently under the sway of bullish forces, nearing the peak of an ascending triangle formation. However, the latest phase of market consolidation has given the bears an opening, pushing the price toward the critical ascending support line.

Solana price chart: Tradingview

Technical analysis on a daily scale hints at a possible downward shift in the short term. The Relative Strength Index (RSI) is balanced at 52, suggesting a short-term bearish momentum. However, the Chaikin Money Flow (CMF) index at 0.15 supports the bullish outlook. The negative trends in the 20 Exponential Moving Average (EMA) and the 50-EMA further accentuate the possibility of a bearish scenario.