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- Solana faces pressure as bulls struggle at crucial horizontal resistance, but a breakout could propel SOL toward $1,000.
- Despite institutional support, Solana’s price has plunged 56% in the last month amid a broader market downturn.
- With over 38 million SOL withdrawn and a token unlock event scheduled, selling pressure could increase, keeping Solana bearish.
Solana (SOL) bulls are under a lot of pressure at the moment, as Captain Faibik pointed out in the post on X. This cryptocurrency is crucial horizontal resistance levels on the monthly chart and can break out once that level is breached. Specifically, the author Faibik believes that once the resistance is broken, there could be a bullish run that may easily propel Solana towards the $1,000 area.
As of press time, SOL is trading at $139 and it has dipped by 12.21% within a day. The token has had a bumpy ride over the last one week as it has shed 17% of its value or declined to $0.013 from $0.0157 to its peers and 56% in the last one month. This represents its lowest point since October 14 and comes at a time when Solana is under pressure due to an unstable market.
Solana Faces Market Downturn
Solana is yet another example of asset that has gained many institutional inflows, but the price of SOL has plummeted. Major investment companies including Franklin Templeton and VanEck have applied to launch Solana-based ETFs which shows emerging institutional support.
However, a steep downfall in the overall market seen now has seen more than $325 billion removed from the crypto market capitalization since Friday. Despite the overall fairly moderate decline, many altcoins have fared much worse; SOL being within the top ten coins by market cap.
Therefore, the Solana outlook remains bearish when considering the above points going forward. Another element affecting the token’s price is the withdrawal of more than 38 Million SOL by the market maker Wintermute from Binance. This withdrawal was done prior to a significant token unlock event that is expected this month, which is estimated to bring over 11.2 million SOL into circulation on March 1. As such, many might anticipate that this event will place additional selling pressure on Solana.
Challenges Facing Solana’s Downtrend
From a technical point of viewpoint, Solana is at present, bearish or trading in a downtrend. This shows that the token is in a bearish trend below the two important Moving Averages: the 50 WMA and the 200 WMA. A bearish signal has emerged in the form of a death cross which is characterized by the 50-day WMA crossing down below the 200-day WMA. This technical pattern also tends to suggest additional downside risk in the market.
Source: TradingView
According to the current price analysis, Solana’s support zone is between $128 and $135. If such support level does not hold, this rate may drop to the extent of $120. Resistance is offered within the $160 – $180 range which are previous consolidation regions that have proven a bit tough on SOL.
The main challenges that Solana is currently experiencing are, Increased selling pressure, bear market, and token unlock. These are amplifying a continuous price drop in the stock, as traders look forward to future trends in the next weeks.
