Solana (SOL) has recently broken below a significant Fibonacci support level, signaling potential weakness in its mid-term outlook. Currently trading at $164.18, SOL has slipped below the 50% Fibonacci retracement level at $165.39, which had previously served as a reliable support zone.
This breach follows rejection from the 38.2% Fibonacci level at $168.40, suggesting that bears have gained the upper hand in recent sessions. Price action has been forming a series of lower highs and lower lows since reaching the peak near $184.62 in early May, indicating that selling pressure has been mounting.
However, what’s particularly noteworthy is that SOL is still trading within the confines of a longer-term rising channel that has been in place since early April, presenting a critical technical junction for traders.
Mixed Technical Picture
The moving average configuration reveals important insights about Solana’s momentum. The blue 100 SMA remains above the red 200 SMA, suggesting that the longer-term bullish structure remains intact despite recent weakness. However, the convergence of these moving averages indicates diminishing bullish momentum, which aligns with the recent price action.
Looking at the oscillators, the stochastic indicator has been declining from overbought territory and is now approaching the midpoint of its range. This indicates weakening bullish momentum, but it has not yet reached oversold conditions that might signal an imminent reversal.
The MACD histogram shows decreasing bearish momentum with smaller red bars, while the MACD line and signal line appear to be flattening, potentially setting up for a bullish crossover if support holds at current levels.
Volume analysis shows mixed signals, with recent selling not accompanied by the kind of volume spike that would suggest a decisive trend change. This could indicate that the current move is corrective rather than the start of a more significant downtrend, especially if the lower boundary of the ascending channel manages to hold as support.
Solana Price Zones
For traders monitoring Solana, several critical price zones demand attention. The immediate support now sits at the 61.8% Fibonacci retracement level at $160.38, which coincides with a previous resistance zone that could now act as support.
If this support zone fails to hold, the next significant support would be at the 100% Fibonacci retracement level at $142.16, representing a complete retracement of the recent upward move. Such a move would likely signal a more significant trend change and could target the psychological $150 level as an intermediate stop.
On the upside, SOL faces immediate resistance at the 50% Fibonacci level at $165.39, which previously acted as support and now likely serves as resistance. Above this, the 38.2% level at $168.40 represents a more substantial barrier that bulls would need to reclaim to invalidate the current bearish momentum.
From a risk management perspective, traders with a bullish bias might consider positions near the current level with stops below the 61.8% Fibonacci at $158.38, while those with a bearish outlook might view any rebounds toward the 50% Fibonacci level as potential shorting opportunities.
