Solana Price Analysis: SOL Price Down 25% Since March, Tests Critical $153 Support Zone

Solana’s (SOL) price has been on a downward trend in the last few days, under the pressure of a 25% correction from its yearly high of $210 in March 2024 and it is now trading at the long-term support level. This pullback has taken SOL back to $153, a significant horizontal support level that also coincides with a long-term ascending support trend line. A breakdown from this level might mark the end of the current up-trending move.

Bearish Divergence and Technical Indicators

Analyzing the chart, there is a bearish divergence on the weekly Relative Strength Index (RSI) which influenced the downward movement. The bearish cross in the MACD which was last seen in 2021, affected the trend and caused a prolonged correction period. According to the current bearish sentiment in RSI and MACD daily frames, the bearish trend may continue. In the daily chart, SOL is range-bound within a symmetrical triangle while the $153 level is the key support.

In the short term, SOL is contained by resistance at the $152 level. The rising of this resistance might bring a recovery while not overcoming this resistance may worsen the condition. The following support level is at $135 which is defined by an ascending support trend line and symmetrical triangle.

Based on the wave count analysis, SOL is in the fourth wave of a five-wave up move. The most probable situation includes the formation of the triangle within the fourth wave and SOL’s breakout and the beginning of the fifth wave. On a more bearish note, SOL may perhaps drop to below $117 that was the price in mid-April before reversing the trend and starting to rise again.

SOL Market Sentiment and External Factors

Solana’s recent weakness can also be explained by the general market and macroeconomic conditions. As a whole, the cryptocurrency market has also shown a decrease with market capitalization decreasing by 10% within four days.

Global factors like stock market correction and a change in expectations concerning the US Federal Reserve’s interest rate decisions have affected investor confidence. The recent mixed economic signals have raised questions over the market's stability, thus affecting cryptocurrencies such as Solana.

Solana has also experienced problems with MEV, where validators manipulated the transaction prices for their gain. The Solana Foundation has devised a countermeasure of excluding such validators from its delegation program to help prevent such rogue actions. Even though the SOL price has been dumped by 15%, the demand for leverage through SOL futures has not been affected in any way. According to Coinglass, SOL’s funding rate has remained stable, which points to market stability and the absence of over-leveraged bulls.

Potential for Recovery and Long-Term Outlook

Solana is at the moment trading around the $150 level with the first barrier standing at the $152 mark. Overcoming this barrier could lead to a temporary rebound with the focus on the nearest strong resistance at $157.

More increases could lead the price to the region of $165. But if SOL does not manage to bounce off the $152 resistance level, there may be another drop with the first significant support at $145, and the second one at $135. Breaking the $135 level on the downside may open the way towards $120.

The number of newly generated addresses on the Solana network has been on the rise in recent days, pointing to rising interest and investment. This could be indicating that the whales are accumulating SOL before a big price pump to the upside. Although the value transferred on-chain in the last week has been decreasing, it shows that there is resistance to buying pressure, which may limit the upward potential.