The price of Solana ($SOL ) is showing early signs of a potential breakout, declining to $165.40 on Monday. $SOL is approaching a key support level that could determine its next significant move.
Technical indicators are flashing red, and bearish sentiment is intensifying, with short positions reaching a monthly high. If $SOL closes below a critical support level, selling pressure may increase, potentially leading to a double-digit decline in the token price to $141.
Solana shows a bearish bias in momentum indicators.
On May 14, the price of Solana faced rejection at the daily resistance level of $184.13 and dropped nearly 10% by Saturday. However, the next day it slightly recovered after finding support at the 200-day moving average of $162.42. This level roughly coincides with the daily support level at $160 and the ascending trend line (drawn by connecting several low points since April 7), and its breakdown indicates a bearish trend. At the time of writing on Monday, it is trading at around $165.40, approaching a critical support zone.
If SOL continues to correct and closes below $160 for the day, it could fall by 14.6% from current levels and retest the May 6 low of $141.41.
The relative strength index (RSI) on the daily chart is at 54, approaching the neutral level of 50, indicating a weakening bullish momentum. If the RSI falls below the neutral level of 50, it will lead to a strong bearish momentum and a sharp decline in Solana prices. The moving average convergence divergence (MACD) indicator is also transitioning to a bearish crossover on the daily chart. If a crossover occurs, it will confirm another sell signal.