Solana Forms Two Consecutive RED Candles – Will This End SOL’s 11-Month Bullish Chain

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Solana SOL’s performance in the past few days has raised concerns about its future. SOL recently lost momentum, failing to breach the key resistance at $138, which could have triggered significant rallies if broken.

Despite SOL’s resilience over the past weeks, the recent shift in market sentiment suggests that it will be difficult to sustain an uptrend in the long term.

Solana trades around $131, having declined 3% over the past 24 hours. Market participants watch as Solana nears critical levels whose impact could deter its future trajectory.

Solana (SOL) Price Action and Indicators Fostering Fear in the Market – New Dangers Ahead

Solana is about to form a Death Cross Pattern, a long-term bearish signal where the 200-day Simple Moving Average (SMA) crosses above the 50-day SMA. If this happens, it could mark the wrap-up of SOL’s 11-month winning streak that began in October 2023.

The emerging death cross has fostered concern among crypto enthusiasts who have long been optimistic about SOL in the past months. If the market structure successfully breaks down, Solana’s gains throughout this period are prone to invalidation.

While the overall market outlook appears bearish, the Moving Average Convergence/Divergence (MACD) hints at a more bullish perspective. The MACD red histogram bars have faded, signaling a diminishing bearish momentum and a potential rebound for Solana.

According to this indicator, SOL will likely recover around its $124 support level, restoring hope to investors anticipating a pullback. If the coin bounces back from this level, like at the beginning of September, it could nullify further dips. 

Even with the long-term bias looking uncertain, the MACD indicator hints at a more bullish trend in the short term.

MACD Bearish Trend Wanes, Signalling Short-Term Recovery

In the chart above, SOL is trading below its 50-day and 200-day SMA, a long-term bearish market trend. In the last two days, it formed 2 consecutive red candles, confirming the increased selling activities in the market.

However, SOL’s Moving Average Convergence Divergence (MACD) indicator has remained on a bullish momentum regardless of the death cross effect. 

The MACD line is still above the signal line and has green histogram bars alongside it. This hints at the short-term bullish trend, giving investors hope.

SOL Approaches Key Resistance Levels; A Significant Rally Underway? 

Solana (SOL) is trading at $131.94, down by 2.94%. Its support levels are $124 and $120. Conversely, the resistance levels are at $138 and $160.

Considering the macro bearish outlook, Solana will likely bounce off at $124, similar to its previous trend at the beginning of this month. 

However, failure to do so would result in a potential dip to the support floor at $120. This level is a critical safety zone that could trigger a rebound Solana, driving it to the resistance at $138.

SOL has consolidated around $120 since March, with $138 as a key level. If this resistance is breached, SOL could keep its upward trend, leading to significant gains.