- Despite a short-term bounce off the $141 support level, Solana’s long-term gains seem unlikely due to a lack of heightened buying pressure.
- The cryptocurrency’s recent rejection at the $160 resistance level underscores the critical nature of this threshold.
- Reports suggest that Solana’s on-chain activity is receding, reflecting reduced usage and demand for SOL and indicating that the current consolidation may continue.
As Solana retreats from the $160 resistance region, experts suggest that the cryptocurrency’s long-term gains may be limited. This article explores the factors contributing to Solana’s current performance and what traders might expect in the future.
Solana’s Resistance at $160
Over the past month, Solana has not experienced significant buying pressure during its range consolidation. The cryptocurrency was forced to retreat from the $160 resistance region, highlighting the importance of this level in recent weeks. An earlier report by AMBCrypto suggested that unless prices could flip the $165-$170 region to support, SOL would likely fall back within the month-long range. This prediction seems to be coming true as Solana’s on-chain activity also recedes, reflecting reduced usage and demand for SOL.
Range High Rejection: Will Lows Be Revisited?
The range from $156 to $116 has its mid-point at $136. Additionally, the Fibonacci retracement levels at $141 and $122 are also expected to act as support. The rejection on Monday, May 6th, was followed by a 10.8% drop. At press time, the $141 level held as support, but it was unclear if it could hold the bears off for the remainder of the week. The RSI on the 12-hour chart has slipped below neutral 50 as an early indication of growing bearish momentum. The MACD showed bullish momentum had been gathering strength, but it was quickly reversed in the past 48 hours. At press time, the MACD was neutral but threatened to flip bearishly. Traders can expect a minor relief bounce at the $136 mid-range support. The trading volume has remained steadily low in the past two weeks, and if it continues, another drop to the $122 level would be likely.
Conclusion
While Solana’s price formed a range in the past month, the Open Interest stayed relatively flat. It saw minor dips and bounces alongside the price oscillation between the range extremes. This indicated a lack of bullish conviction from futures market participants. The spot CVD also formed a range. This was a positive finding for long-term bulls, as it underlines a period of consolidation. Ideally, buyers want to see the spot CVD trend higher during consolidation. Given the uncertainty and fear in the market now, it’s good enough that the spot CVD did not begin a downtrend. However, with the current market conditions and Solana’s performance, traders should be prepared for potential challenges ahead.
