Selling Pressure Remains High for Solana Despite Breaking Support Level

Solana (SOL) witnessed a dip below the $90-support zone, a critical level that Solana bulls have been striving to protect throughout January within the $87-$91 demand range. The recent drop in Bitcoin (BTC) below the $40.2k-support level further emboldened SOL bears.

In January, the stablecoin transfer volume reached an unprecedented $316 billion and continues to rise. Despite this, the short-term market sentiment for SOL remains notably bearish.

Analyzing the 12-hour price chart using the VRVP tool reveals a persistent bearish market structure since January 6. Bulls struggled to overturn the structure positively, requiring a session close above $108.15 for a bullish reversal. The Relative Strength Index (RSI) has been below the neutral 50 since January 18, indicating bearish momentum. Additionally, the On-Balance Volume (OBV) has slightly decreased over the past week, signaling increased selling volume in recent days.

The Visible Range Volume Profile (VRVP) tool highlighted the significance of the $71-$76 zone as a crucial support level, while the $77-$90 area exhibited lower trading volume, indicating potential swift movements through this region.

Related: Surge in Solana NFT Sales Volume Over the Past Week

Moving further down, the $56-$62 area displayed the highest volume in the visible range, with the Point of Control (red) situated at $57.8, marking it as a critical support level based on the past 14 weeks of trading.

Recent trends in Open Interest, declining since January 19, coupled with the rapid fall in Solana’s price, suggest that traders are increasingly adopting a cautious stance amid the prevailing downtrend. The spot Cumulative Volume Delta (CVD) has consistently trended south over the past four days, aligning with the On-Balance Volume (OBV) and indicating a growing selling volume. Taken together, these indicators and price action point towards a likely descent towards the $70 level.