Traders are betting everything on the decline

Another failed attempt to break this level recently triggered a 13% drop in SOL’s price, sending it tumbling to $139. So, as the cryptocurrency faces continued bearish pressure, traders are wondering if further declines are in store.

Solana Traders May Not Know It, But They Have a Trick Up Their Sleeve

Currently, Solana’s macro momentum points toward a bearish outlook, as reflected by major technical indicators. Indeed, the Relative Strength Index (RSI) has fallen below the neutral line of 50.0, signaling growing bearish momentum. The RSI’s position in the bearish zone thus suggests that selling pressure has intensified, with little indication of a near-term turnaround.

Following Solana’s failure to breach the $161 resistance level, bearish sentiment strengthened. So, with the RSI showing no signs of recovery, it appears that SOL will face more downward pressure in the short term, which could cause the price to fall further.

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Market sentiment around Solana has also plummeted. In effect, traders are positioning themselves to take advantage of a possible further decline by placing short contracts on the futures market: these have now exceeded long-term contracts as traders seek to profit from the fall in price. of the altcoin.

This change in sentiment is also confirmed by Solana’s funding rate, which has become negative for the first time in more than two weeks. A negative funding rate indicates that the market is now mostly bearish, with traders forecasting more losses in the near future.

Find support first

Solana price currently sits at $139, just below the local support level of $140. Given the continued bearish momentum and negative market sentiment, a further fall to $124 is very likely. This level served as support for the SOL last month, with the cryptocurrency having rebounded to this area previously.

However, if Solana fails to hold the $124 support level, a fall to $120 may follow, forming the lower boundary of the consolidation range below $161. This would represent a further decline for the cryptocurrency, leaving it vulnerable to additional losses.

To go further: Solana (SOL) price forecast for 2024/2025/2030

On the contrary, if Solana manages to turn the $140 mark into a support level, it could then have a chance to climb back towards the $160 mark. Thus, breaking through the local resistance at $155 would negate the current bearish outlook, providing the altcoin with another chance to recover and potentially move higher in the coming weeks.

Moral of the story: Sometimes a crypto has to hit rock bottom to get better.