Solana Price Faces Potential Decline Amid Bearish Indicators

According to Cointelegraph, Solana (SOL) has experienced a significant price drop, falling nearly 9% in a single day and approaching a critical threshold of $130, a level not seen since September 18, 2024. This decline is accompanied by two crucial indicators on Solana's daily chart that are nearing a bearish crossover, suggesting the possibility of further declines below $100. The 50-day and 200-day exponential moving averages are on the brink of forming a 'death cross,' a pattern historically seen as a negative signal for cryptocurrencies. This technical setup raises concerns about Solana's price trajectory. Currently, SOL is positioned between the 0.5 and 0.618 Fibonacci retracement levels, known as the 'golden zone.' The $130 mark has previously served as a robust support level during a six-month consolidation period in 2024, aligning closely with the 0.618 level. Given this context, Solana may consolidate and establish a bottom between $130 and $150 in the coming weeks, considering the historical and technical significance of these levels. A daily close below $130 could lead to a retest of the liquidity pocket between $120 and $110, as indicated by the chart analysis. The relative strength index (RSI) for Solana has dropped below 30 for the first time since June 2023. Historically, when the RSI has reached such oversold levels, it has often signaled a trend bottom, indicating the potential for a price reversal or an oversold bounce in the short term. The recent price movements have significantly impacted Solana's market sentiment and visibility. Crypto commentator Miles Deutscher noted that the altcoin's sentiment is at a one-year low, describing the current situation as Solana's 'capitulation moment.' Similarly, data analytics platform Santiment reported that most investors are bearish on major cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana. This bearish sentiment opens the possibility for a mean reversion for Solana. Following a 50% correction, the potential for a deeper decline may be limited. The upcoming SOL token unlocks are widely anticipated by investors, and it is possible that this event has already been factored into the current price. This article does not provide investment advice or recommendations. All investment and trading decisions involve risk, and readers are encouraged to conduct their own research before making any decisions.