Solana (SOL) Faces Danger of Dropping Below $110 After 38% Decline This Month

Solana (SOL) has been under substantial selling pressure, recently falling beneath the $120 mark, showcasing its lowest price point since February 2024. Over the last 30 days, the cryptocurrency has plummeted over 38%, which firmly establishes a bearish trend.

With sellers exerting strong influence, SOL now confronts a crucial test of its support levels. For a genuine recovery to occur, it must surpass significant resistance zones which could indicate a shift in market momentum.

Bearish Setup Revealed by Ichimoku Cloud

The Solana Ichimoku Cloud analysis reveals that SOL is currently trading below both the blue Tenkan-sen (conversion line) and the red Kijun-sen (base line), reinforcing its short-term bearish trend.

Although there was a recent bounce from a local low, the price has not managed to reclaim these vital resistance levels. Moreover, the Ichimoku cloud (Kumo) in the upcoming view remains red, reflecting persistent bearish sentiment in the cryptocurrency market.

The cloud's position is well above the current price, indicating that any short-term recovery SOL might experience will likely encounter resistance around the $130 to $135 range.

The Tenkan-sen being below the Kijun-sen further underlines the bearish outlook, as this crossover often signals downward momentum.

To detect any signs of a trend reversal, SOL would need to break above these indicators and ideally penetrate the cloud, suggesting a potential transition to a neutral phase. Until such events transpire, the prevailing bear market and the fragile price structure imply that any rebounds may only be temporary before the overarching downtrend takes hold again.

Directional Movement Index (DMI) Indicates Sellers' Dominance

The latest data from Solana's Directional Movement Index (DMI) chart shows that the Average Directional Index (ADX) is currently at 33.96, a noteworthy jump from just 13.2 two days ago.

The ADX serves as a measure of trend strength, with readings exceeding 25 indicating a robust trend, while values below 20 are seen as weak. This recent uptick validates that Solana's downward trajectory is intensifying.

The +DI (positive directional index) has fallen to 11.71 from 15.5 two days ago but has shown minor recovery from a low of 8.43 yesterday. In contrast, the -DI (negative directional index) is at 32.2, having increased from 25.9 two days earlier, although down from a peak of 35 hours ago.

The current positioning of the +DI and -DI lines indicates that sellers continue to dominate the market, as the -DI remains notably higher than the +DI.

The recent decline in -DI from 35 to 32.2 suggests a brief period of relief, yet the swift rise in the ADX underscores that the dominant downtrend persists. The slight increase in +DI points to minimal buying pressure, insufficient to sway momentum in favor of bullish traders.

The Outlook for Solana: Will It Dive Below $110?

According to Solana's Exponential Moving Average (EMA) lines, the bearish trend continues as the short-term EMAs are positioned below the long-term EMAs.

This arrangement signals that the downward pressure remains strong, even as the price attempts a recovery. If this rebound strengthens, Solana's price might encounter resistance at $130 and $135, critical levels that must be breached for a trend reversal to be considered likely.

A successful breakthrough of these resistance levels could propel SOL toward $152.9. If it moves past this with sufficient buying enthusiasm, the path may clear for a rally towards $179.85, a level last reached in early March when Solana entered the US crypto strategic reserve.

However, if the bearish formation remains intact and selling pressure kicks in again, Solana might revisit the support levels of $115 and $112, both of which have served as crucial price floors previously.

Should it fail to uphold these supports, there is the potential for a more pronounced decline, potentially dropping SOL below $110 for the first time since February 2024. The current EMAs suggest that the downtrend remains entrenched unless Solana successfully reclaims major resistance levels, indicating a potential for a bullish crossover and a shift in overall market sentiment.