Solana (SOL) recently struggled to break through the local resistance level of $138, which could have sparked a new rally for the cryptocurrency. Despite its strong performance over the past year, market sentiment has shifted, and the $120 support level may not hold for long.
Solana’s price movements are now under closer scrutiny as it hovers around a crucial level that could influence its future trajectory.
Solana Faces New Challenges
Solana is on the brink of forming a “death cross,” a bearish technical pattern where the 200-day Exponential Moving Average (EMA) crosses above the 50-day EMA. If this occurs, it could signal the potential end of the 11-month rally that began in October 2023.
The looming death cross has raised concerns among investors who have remained optimistic about Solana for nearly a year. A breakdown in market structure could invalidate the gains SOL has accumulated during this period.
While the macro outlook leans bearish due to the impending death cross, the Moving Average Convergence Divergence (MACD) indicator presents a more nuanced short-term picture. It suggests that bearish momentum may be weakening, implying that Solana could be on the verge of a recovery. The MACD has shown signs of potential rebound near the $124 support level, offering a glimmer of hope for investors anticipating a reversal.
If Solana can rebound from the $124 level, as it did in early September, it may prevent further losses. MACD signals suggest that while the long-term outlook remains uncertain, there is room for short-term optimism.
SOL Price Forecast: Charting the Path Ahead
Currently trading around $130, Solana is eyeing a potential bounce from the $124 support level, similar to its price action earlier this month. A break below this level seems unlikely in the near future, and even if it does happen, Solana has a strong safety net at the $120 support floor.
Since March, Solana has consolidated above the $120 mark, making $138 the critical resistance level at present. A breakthrough above this resistance would indicate that SOL could resume its upward trajectory, despite recent bearish concerns.
However, if the death cross materializes, Solana may face significant selling pressure, driving its price below $120. This would invalidate the neutral-to-bullish narrative and could result in substantial losses.
