Solana (SOL) is facing significant short-term challenges as it forms a death cross on its three-hour chart, a technical pattern that suggests further downside risk. With the price slipping below $130, traders are questioning whether $100 could be the next key support level. As the broader crypto market struggles, the upcoming Solana upgrade offers some hope, but the market remains cautious about the future direction of SOL.
Solana Faces Short-Term Bearish Pressure as Death Cross Forms
Solana (SOL) is currently under significant pressure, with its price moving into the red zone. The formation of a death cross on its three-hour chart has raised concerns among traders, signaling potential further declines in the short term.
A death cross occurs when a short-term moving average (MA 50) falls below a long-term moving average (MA 200), often seen as a bearish indicator. As a result, Solana’s price has dropped to $125.83, marking a 1.74% loss over the past 24 hours and a 12.08% decrease in the past week.
This technical pattern follows a broader sell-off in the cryptocurrency market, which has been ongoing since the beginning of the week. The market has seen downward movement despite the relative strength of equities and a weaker U.S. dollar. Solana’s price action now appears to be stuck in a range between $116 and $161, indicating that a decisive move is yet to take place. For now, traders are awaiting the next move in the market, adjusting their strategies accordingly.
Solana’s Short-Term Outlook: $100 Could Be the Next Support Level
In the wake of the death cross, Solana faces further downside risks. Technical indicators like the Relative Strength Index (RSI) are pointing to bearish momentum, with the RSI currently sitting below 40, which suggests a market that is neither oversold nor neutral but showing weakness. If the price continues to decline, the next support levels to watch are at $116 and potentially $100.
At these levels, Solana could find some buying interest, especially as it approaches the oversold zone. Historically, $100 has been a key psychological level and an important support area. If SOL hits this level, it could prompt a reversal in sentiment, though this will depend on broader market trends and how traders react to upcoming technical developments.
Resistance Levels and Key Indicators to Watch
Despite the recent bearish price action, Solana still faces resistance levels that could prevent further declines in the short term. The first resistance is seen around $132, where the MA 50 currently sits.
A break above this level could signal a potential recovery in Solana’s price. Another critical resistance area lies at $135, coinciding with the MA 200. If Solana manages to break above these levels, the outlook might improve, with further upward movement possible.
However, traders should remain cautious as the market sentiment continues to be affected by the broader trend in cryptocurrencies. The short-term trend appears bearish, but if Solana manages to break through resistance, it could lead to a more positive outlook for the coin.
Solana’s Upcoming Upgrade May Provide Market Support
Despite the ongoing bearish market sentiment, there is some hope for Solana’s future. An upcoming upgrade, Agave v3.1, is expected to improve performance and add new features to the Solana blockchain. This upgrade will bring significant enhancements, such as reduced restart times for validators and better disk I/O performance. These improvements are expected to make the Solana network more efficient and reduce disruptions in transactions.
Although upgrades like these could help improve the network’s stability, the overall market sentiment will likely play a larger role in determining the direction of Solana’s price in the short term. The impact of the upgrade on SOL’s price remains uncertain, and it is crucial for traders to monitor how the market reacts to both technical and fundamental developments
The post Solana (SOL) Struggles as Death Cross Forms, Is $100 the Next Target? appeared first on CoinCentral.
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