The Solana price experienced a slight 0.65% increase on Tuesday amid market recovery, reaching $132. However, the daily candle’s long-wick rejection hints at overhead selling pressure and the possibility of further correction as the death cross nears.
There is speculation regarding a potential 10% drop in Solana’s price as the cryptocurrency has been trading sideways around the $120 support level. The absence of clear dominance from buyers or sellers suggests a lack of direction in the market. The looming death crossover of the 50-and-200-day EMA on the daily chart since October 2023 could trigger a significant downturn, potentially leading to a 9-10% decrease to revisit the $120 level.
A breach below the $120 support might reinforce the grip of sellers, resulting in a 12.5% decline as the market seeks support at the lower trendline established since March 2024. Additionally, Santiment analytics data reveals a decline in Solana’s development activity from late July to mid-September 2024, indicating reduced developer contributions to the ecosystem.
The diminishing total volume locked (TVL) standing at $4.8 billion portrays a struggle to attract new capital, possibly signaling waning demand for Solana. Conversely, if the $120 support holds, buyers could regain control amid the upcoming breakpoint conference event, possibly averting a major correction as long as the daily chart rectangle pattern remains intact.