Solana (SOL) has dropped sharply from $176 to $141 in the past 8 days. After this significant decline, many traders were hoping for a recovery.
However, the path for altcoins to recover lost ground is now facing challenges. This is mainly because changes in investor behavior could delay or hinder additional price increases.
Solana Investors Selling
Long-term holders (LTH) have shifted from strong buyers to sellers. Outflows from LTH wallets have reached a two-month high, a movement not seen in the previous month.
This change in behavior indicates a significant shift in the market, as LTH are considered the backbone of asset price stability.
The continued selling by these investors raises questions about Solana's price stability. Since LTH are typically considered more patient investors, their selling decision may indicate a loss of confidence.
Solana's macro momentum is concerning as key technical indicators continue to signal bearish market conditions.
The 50-day moving average (EMA) and 200-day EMA that traders are watching continue to show weakness. The death cross that began in March is still ongoing.
The 50-day EMA almost crossed above the 200-day EMA at the end of May but failed. This suggests that a recovery may not be imminent. This persistent downward trend jeopardizes Solana's recovery.
If the death cross continues and EMAs continue to diverge negatively, it could signal further price decline.
SOL Price Needs Increase
Solana's price has dropped 18% in the past 8 days but showed a slight recovery, rising 5% in the last 24 hours. Currently trading at $152, SOL faces strong resistance at the $154 level.
This barrier is crucial for potential bullish movements in the short term. If the price fails to break this resistance, further decline may be expected.
Considering the current market sentiment and technical indicators, Solana's price may struggle to break the $154 resistance. Instead, it may retreat to $144. If this support does not hold, the price could drop further to $136.
However, if broader market conditions improve, Solana could experience a rally. Breaking the $154 resistance would push the price to $161. Reaching this level would end the death cross pattern, restore investor confidence, and invalidate the bearish outlook.
