Solana is facing increasing downward pressure as its relentless decline is pushing the token closer to a critical support area — a price level that hasn’t been touched in more than seven months.
The prolonged weakening trend reflects widespread pessimism in the market, while technical indicators continue to warn of deeper losses if the current situation doesn’t show signs of reversal soon.
Solana investors are suffering heavy losses
Solana’s exponential moving averages ((EMA)) are signaling a warning about the potential formation of a death cross. This phenomenon occurs when the short-term EMA crosses below the long-term EMA, typically signaling the beginning of a strong and prolonged downtrend.
Solana’s price history shows that the coin may be repeating cycles that occurred in Q1 and Q2 of this year. During those periods, SOL dropped as much as 59% from its local peak before the death cross pattern officially appeared. If a similar scenario unfolds, Solana could fall to the $98 range, extending the current decline to 47% from the recent peak, reflecting weakening market sentiment and a still-high risk of further downside.
BiSOL/USDT 2-day chart | Source: TradingView
The macro picture is also not very bright. Solana’s net realized profit/loss ratio has fallen to its lowest level since June 2023, indicating that investors are taking significant actual losses after the recent drop. This indicator often reflects broader shifts in sentiment, as investors reassess risks during rapid market downturns.
However, there is still a glimmer of hope. History shows that when the net realized profit/loss ratio drops below 0.1, strong reversals often follow. This occurred in March, April, and September 2023, each time signaling the start of an impressive recovery. If this scenario repeats, Solana could see a sharp rebound as actual losses reach a saturation point and selling pressure eases.
SOL price remains vulnerable
SOL is currently trading around $127, holding above the key $123 support level. This altcoin is in a waiting phase for overall market stability and the return of investor confidence to kick off a recovery phase.
BiSOL/USDT 2-day chart | Source: TradingView
However, technical indicators still warn that the risk is tilted to the downside. If Solana moves closer to forming a death cross, the price could continue to plunge, break below $123, and fall toward the $105 region, or even possibly hit $100. This correction would represent a drop of about 21.8% from current levels, returning the price to areas last seen in March.
Conversely, if selling pressure eases and investor sentiment improves, Solana could bounce from $123 and aim to challenge the $136 region. Breaking this level would open the way to $157, invalidating the bearish scenario and restoring the coin’s growth structure.
SN_Nour
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