Solana Plummets 17% As SOL Hits $118: Is a Break Below Inevitable?

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As a seasoned crypto investor with battle-scarred fingers from navigating through bull and bear markets alike, I find myself standing at the precipice of another significant event for Solana (SOL). The recent 17% plunge has me feeling like I’ve taken an unexpected detour on the crypto highway, finding myself back at the $118 support level.

Currently, Solana (SOL) is undergoing a substantial drop, falling more than 17% and approaching the vital support point at $118. This steep decrease has intensified pressure on this important level, causing worry among traders and investors about the potential for additional decline. Historically, $118 has been a robust barrier for Solana, but given the prevailing bearish trends in the market, its effectiveness as a support is uncertain.

Using crucial technical markers, this write-up offers a thorough examination of Solana’s recent price fluctuations, considers the possibility of it breaching the $118 resistance level, and delves into possible outcomes for SOL.

In my current research, I’ve observed that as of this writing, Solana has experienced a 17% drop, currently trading at around $119.78 over the past 24 hours. This digital currency maintains a market cap surpassing $54 billion, marking a 18.45% decrease. Conversely, its trading volume has seen an impressive increase of 182.21%, amounting to over $9.4 billion within the same period.

Technical Analysis: Indicators Pointing To A Potential Break For Solana

In the past 4 hours, Solana has shown strong signs of bearing down in value. Its price has dipped below its 100-day Simple Moving Average (SMA) and is currently trying to drop below the $118 resistance level. If this key level is broken, it might trigger a more significant bearish trend for the cryptocurrency.

In simpler terms, when looking at a 4-hour chart, the Relative Strength Index (RSI) has fallen to about 24.74%, which is considered an oversold range. This suggests that the RSI indicator may indicate that Solana (SOL) could continue its downward trend and potentially drop below $118.

In my analysis of Solana’s 1-day chart, I have observed a noticeable surge in selling pressure. This is evident in the repeated formation of bearish candlesticks, indicating that sellers seem to be dominating the market. As each trading session unfolds, they appear to be driving the price lower and regaining control progressively.

Additionally, the creation of these ‘bearish’ candles, where the closing price is less than the opening price, typically indicates a continuous selling trend. This trend is frequently associated with a deeper problem or weakness within the asset being traded.

As a researcher, I’ve noticed an intriguing development: The one-day Relative Strength Index (RSI) has dipped below 50%, indicating a potential for further price decrease. This dip signifies an increase in bearish pressure, as it suggests that sellers are still actively shaping the market dynamics. Given their ongoing activity, it appears likely that Solana’s price may continue to trend downward.

Potential Scenarios: What Happens if $118 Fails?

If Solana continues its recent downward trend and falls below the current support of $118, it could potentially push the price lower to test the $99.44 support. Once this level is broken, there’s a possibility that the asset might continue to decrease in value, aiming for the $79.24 support zone, with potential further drops below that range as well.

If SOL‘s price manages to rise above its current support at $118, it could potentially climb again towards its previous resistance at $160. After surpassing this resistance, the cryptocurrency might continue to increase in value, aiming for the next challenge at $170 and possibly other higher levels beyond that.

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2024-08-05 15:04