According to Kraken, there was a break above a key bearish trend line with resistance at $85.00 on the 4-hour chart of the SOL/USD pair, which could start another decline if it fails to overcome the resistance at $92 or $94.
Solana is attempting a recovery wave from the $80 zone. SOL price might struggle to break above the $92 and $94 resistance levels in the near term.
SOL price started a fresh decline from the $104 resistance against the US Dollar. The price is now trading below $95 and the 100 simple moving average (4-hours).
Solana Price Faces Key Obstacles
Solana price started a new decline like Bitcoin and traded below the $95 support zone. There was a clear move below the $92 and $90 support levels.
The SOL price found support near the $79 zone. A low was formed near $78.96 and the price is now attempting a recovery wave like Ethereum. There was a move above the resistance at $84. The price rose above the 23.6% Fibonacci retracement level of the downward move from the high of $103.40 to the low of $78.96.
Additionally, there was a break above a key downtrend line with resistance at $85.00 on the 4-hour chart of the SOL/USD pair. It is now trading below $95 and the 100 simple moving average (4-hours).
The immediate resistance is near the $91.20 level. It is close to the 50% Fibonacci retracement level of the downside move from the high of $103.40 to the low of $78.96. The first major resistance is near the $94 level or the 100 hourly SMA.
The main resistance is now near $98. A successful close above the $98 resistance could set the pace for another major rally. The next key resistance is near $112. Any further gains could send the price towards the $120 level.
Another Descent of SOL?
If SOL fails to overcome the resistance at $91.20, it could start another decline. Initial support on the downside is near the $84.80 level. The first major support is near the $80.00 level, below which the price could test $75.00. If there is a close below the $68 support, the price could fall towards the $72.50 support in the near term.
4-Hour MACD Technical Indicators: The MACD for SOL/USD is gaining pace in the bearish zone.
4-hour RSI (Relative Strength Index): The RSI for SOL/USD is below the 50 level.
Main support levels: $84.80 and $80.00. Main resistance levels: $91.20, $94.00 and $98.00.
Solana’s core decentralized applications (DApps) metrics showed strength in January, with the network’s total value locked (TVL) reaching 15.3 million SOL. The amount deposited in its smart contracts is approaching a 3-month high despite the SOL token price dropping by 28% in 30 days.
The Solana network has seen significant growth in activity and transaction volumes. However, it still trails competitors like Ethereum and BNB Smart Chain in terms of absolute numbers.
Solana saw a 6% growth in transactions and a 12% increase in the number of active DApps users in the last seven days. In comparison, the Ethereum network remained relatively flat in the same period, while BNB Chain and Polygon saw a 31% and 19% decline in volumes, respectively.
It is not possible to determine whether SOL’s recent bounce to $80 simply reflects increased demand for airdrops and the newly launched ‘token extensions’, meaning momentum could wane after the initial enthusiasm.
By Leonardo Perez
