Solana’s price saw a modest 0.65% increase as the market recovered on Tuesday, reaching $132. Despite this uptick, the daily candle displayed a rejection with a long wick, suggesting pressure from selling above and hinting at the possibility of further correction as the death cross approaches.
The recent Solana price action has been mostly sideways, with attempts to stabilize above the long-term support level of $120. This lack of clear direction indicates a balance between buyers and sellers in determining the next trend.
As the potential correction looms, a death cross of the 50-day and 200-day EMA on the daily chart is anticipated for the first time since October 2023. This impending crossover should be monitored carefully as it could amplify bearish momentum, potentially leading to a 9-10% decline in the Solana price back to $120.
Any breach below the $120 support level could further empower sellers and trigger a 12.5% drop, seeking support at the lower end of the range pattern maintained since March 2024.
Additionally, data from Santiment analytics reveals a decline in Solana’s development activity from late July to mid-September 2024. The diminishing development activity indicates reduced contributions from developers to the Solana ecosystem, possibly signaling a slowdown in projects and ecosystem involvement.
Similarly, the Solana total volume locked (TVL) currently stands at $4.8 billion, reflecting a weakening trend and suggesting challenges in attracting new capital or retaining existing investments. This extended consolidation period might indicate waning demand for Solana, potentially leading to further corrections in the SOL price.
However, if the $120 support level or the lower trendline remains strong, buyers could regain momentum, especially with the upcoming breakpoint conference event. Therefore, the Solana price might avoid significant corrections as long as the daily chart rectangle pattern remains intact.
The original post can be found at CoinGape.