Solana (SOL) shows signs of a potential recovery after a dramatic 24-hour plunge that saw the token dip to a low of $96.87. Following a sharp sell-off, SOL has rebounded slightly, trading at $100.95 at the time of writing, a 3.98% gain in the latest hourly candle, and a 16.37% decline in the last 24 hours. However, technical indicators reveal that the bulls have significant resistance before reclaiming momentum.
The Fallout: Price Breaks Below Critical Support
SOL’s sharp decline began as the price broke below the clustered exponential moving averages (EMAs) of 20, 50, 100, and 200 on the hourly timeframe. These EMAs are currently aligned as follows:
- EMA 20 (Red): $105.98
- EMA 50 (Orange): $111.75
- EMA 100 (Light Blue): $115.68
- EMA 200 (Blue): $120.01
This alignment illustrates a strong bearish trend, with each EMA stacked above the next—a textbook signal of downward momentum. The aggressive slide from $120+ to $100 territory confirms that sellers were in control throughout the week.
Attempted Reversal: A Flicker of Hope?
SOL bounced back from intraday lows of $96.87 in the most recent hourly candle, marking a 4% green candle that may suggest short-term relief or a potential trend reversal. Yet, the rebound still leaves SOL far below the nearest EMA, which lies at $105.98 (EMA 20). The price must be reclaimed for this short-term EMA and held above it for a meaningful reversal.
Until that happens, the bounce could be a dead-cat bounce, driven by oversold conditions and short-term profit-taking by bears.
Volume and Momentum: Traders Watching Closely
Though volume is not explicitly shown in the chart, the formation of a significant bullish candle after a prolonged decline often suggests renewed interest from buyers. However, the momentum remains fragile without follow-through in the next few candles and a crossover of the EMA 20 and 50.
Day traders and scalpers may view this bounce as a quick opportunity, but swing traders should remain cautious unless the price starts to form higher highs and higher lows—something absent in this downtrend.
Key Levels to Watch
- Immediate Resistance: $105.98 (EMA 20)
- Major Resistance: $111.75 (EMA 50)
- Support Floor: $96.87, followed by psychological support at $95 and $90
If SOL fails to hold the $96–$97 region, further declines toward the $90 range become highly probable.
Related article: Solana Soars Past $138: Can SOL Hit $200 or Is Another Crash Coming?
Conclusion: Short-Term Relief, Long-Term Uncertainty
Solana’s current price action paints a picture of short-term optimism in a broadly bearish environment. While the current rebound is promising, technical indicators advise caution. Traders should watch for volume confirmation and price movement above the 20 EMA before calling it a trend reversal.
In the meantime, expect volatility, especially with major resistance levels looming above. SOL may need more than one green candle to break free from this bearish grip.
