Solana ($SOL ) recently experienced a sharp decline, dropping from $176 to $141 in just eight days. After this significant drop, many traders hoped for a rebound.
However, the alternative coin's path to recover what it has lost now faces challenges, primarily due to a shift in investor behavior that may slow or prevent further price gains.
Solana investors are selling
Long-term holders (LTHs) have shifted from being established buyers to sellers. Outflows from LTH wallets have recently surged to a two-month high, a move we have not seen in the past month.
This change in behavior indicates a significant shift in the market, as long-term investors are often considered the backbone of asset price stability.
The continued selling by these investors raises doubts about the short-term stability of Solana's price. Since long-term investors are generally seen as more patient, their decision to sell indicates a potential loss of confidence.
Long-term Solana investors have changed their stance.
The overall momentum of Solana remains concerning as key technical indicators continue to signal bearish market conditions.
The 50-day exponential moving average (EMA) and the 200-day exponential moving average, closely monitored by traders, are showing signs of continued downward trend. The bearish crossover that began in March is still in effect.
Although the 50-day exponential moving average approached crossing above the 200-day exponential moving average in late May, it failed to do so, indicating that a recovery may not be imminent. This ongoing downward trend puts Solana's recovery at risk.
If the bearish crossover continues and the two exponential moving averages keep diverging negatively, it could signal further price declines.
Solana's exponential moving averages.
SOL price needs a boost
Solana's price recently dropped by 18% in just eight days but has seen a slight recovery, rising by 5% in the past 24 hours. It is currently trading at $152, facing significant resistance at the $154 level.
This barrier is critical for any potential short-term upward movement. If the price fails to break this resistance, further declines may be on the horizon.
Given the current market sentiment and technical indicators, Solana's price may struggle to break the resistance at $154. Instead, it may see a pullback towards $144. If this support fails to hold, the price may decline further to $136.
Solana price analysis.
However, if broader market conditions improve, Solana may see an increase. A breakout above the $154 resistance would push the price towards $161. Reaching this level would end the bearish crossover pattern, helping to restore investor confidence and invalidate bearish expectations.
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