Solana, identified by its ticker SOL, has been experiencing a downward trend following its peak at $295.83 on January 19. Currently trading at $226, the altcoin has seen a decline of 23% from its highest value.
The resurgence of bearish sentiment in the market has resulted in increased selling pressure on SOL, accompanied by a noticeable dip in demand.
Solana reached its record high on January 19, driven by the heightened interest in the Solana-based meme coin, TRUMP. However, the subsequent inauguration of Donald Trump on January 20, and the introduction of another meme coin, MELANIA, led to a decrease in TRUMP's trading activity. This decline has affected overall activity on the Solana network and, consequently, SOL's performance.
Currently at $226, SOL has witnessed a 9% decrease in the last 24 hours. This decline has pushed its price below the 20-day Exponential Moving Average (EMA), indicating weakening market momentum.
The 20-day EMA reflects the average price over the preceding 20 trading days, emphasizing recent price trends to assess short-term movement. A decrease below this moving average often signals a bearish shift, indicating fading upward momentum due to heightened selling pressure.
Further analysis using SOL's Moving Average Convergence Divergence (MACD) indicator supports this negative outlook. As of now, SOL's MACD line (blue) is set to cross beneath its signal line (orange).
Such a configuration in the MACD signals a bearish crossover, which often suggests growing selling momentum and the potential for a continued price decline.
Should selling pressure on SOL intensify, its Fibonacci Retracement tool indicates that the price could drop further, potentially falling below $210 to around $202.73.
Conversely, a resurgence in demand for Solana could negate this bearish projection, possibly allowing SOL to attempt a rebound toward its previous all-time high.
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.