Solana (SOL) retested the $120 support level on Monday as Bitcoin and other major cryptocurrencies recorded losses.
The cryptocurrency lost 30% of its value in November, making it one of the worst performers among the top 10 cryptocurrencies by market cap.
Solana is now experiencing a risk-off sentiment in the derivatives market as investors withdraw capital, with the bears currently controlling the market.
Technically, Solana could extend the decline amid the strong bearish momentum, but could record a temporary pump in the near term.
Bearish pressure mounts for Solana
Investors are losing interest in Solana as the broader cryptocurrency market sell-off continues.
Bitcoin briefly dropped to the $84k level on Monday, with over $800 million worth of positions liquidated within 24 hours.
JUST IN: $800,000,000 worth of crypto longs liquidated in the past 24 hours.
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Data obtained from CoinGlass shows that the SOL futures Open Interest (OI) is down 6.17% in the last 24 hours to $7.00 billion.
The dip in OI suggests that investors are losing their risk appetite, which is increasing market fear.
Furthermore, the OI-weighted funding rate turned negative to -0.0055% on Monday, indicating increased confidence among bears.
The $31.88 million in long liquidations on Solana surpassed the $2.99 million in short liquidations over the last 24 hours, reflecting strong bearish dominance in the market.
SOL could retest $140 despite bearish momentum
The SOL/USD 4-hour chart is bullish and efficient despite Solana losing 30% of its value in November.
The coin looks set to form a bearish candle on the daily chart following its recent bearish move.
The decline recorded by SOL over the past five days has erased last week’s gains, with the coin retesting the support level just above $120.
If the daily candle closes below the $126 support level, SOL could dip lower and retest the March 11 low at $112.
The next major support level stands at $95, last tested on April 7.
The Relative Strength Index (RSI) is at 35 on the 4-hour chart, below the neutral 50, indicating a strong bearish trend.
If RSI continues to stay around the oversold region, Solana could experience further selling pressure.
The Moving Average Convergence Divergence (MACD) remains above its signal line, suggesting a slight bullish bias.
However, any change in the MACD level would confirm refreshed bearish momentum, triggering a sell signal.
On the upside, if the bulls regain control of the market, SOL could retest the $140 resistance before targeting the $150 psychological level.
The current market conditions remain bearish, making a long-term bullish price action unlikely at the moment.
Nick Forster, Founder at the on-chain options platform, Derive.xyz, told Invezz in an email that macro uncertainty continues to dominate.
A BOJ tightening and ambiguity around a US Fed cut continue to negatively affect Bitcoin and the broader cryptocurrency market.
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