By Chris Hollingworth 
Solana (SOL) recently experienced a significant technical indicator known as a “death cross” on its one-day chart on March 12. This event occurred as the altcoin was consolidating near its long-term support level at $125, raising concerns about a potential sell-off that could drive the SOL price below $100 for the first time since February 2024.
A death cross happens when the 50-day simple moving average (SMA) crosses below the 200-day SMA, indicating a bearish trend. In the case of Solana, the 50-day and 200-day exponential moving averages (EMAs) also triggered a death cross last month, leading to a 17% price decline from $137 to $122. While both SMA and EMA death crosses have similar implications, the EMA reacts more quickly to price changes, potentially hastening the bearish momentum.
Historically, Solana has faced death crosses three times since its inception, with the first one in 2022 resulting in a 90% price collapse exacerbated by external factors. The second death cross in September 2024 was short-lived and followed by a market rally. The current market conditions for Solana resemble those preceding the 2022 death cross, with a new all-time high preceding the downturn.
Recent data shows a significant drop in Solana’s revenue, declining by 93% from $238 million to $32 million since January, indicating reduced network activity post-memecoin frenzy. Traders are now closely monitoring whether Solana can defend the $125 support level, with a potential bullish reversal contingent on maintaining support between $125 and $110.
A weekly close below $125 could signal further weakness, potentially leading to a price drop below $100 and a target around $80, representing a substantial correction of 30%. However, bullish divergences observed on the 1-day and 4-hour charts between the price and relative strength index (RSI) offer a glimmer of hope for a potential price recovery above $125, potentially avoiding a further decline below $100.
In conclusion, Solana’s current technical and market sentiment suggest a delicate balance between bullish and bearish scenarios, with traders closely watching key support levels and technical indicators to gauge the altcoin’s future price movements.
Please note that this article does not provide investment advice and readers are encouraged to conduct their own research and analysis before making any financial decisions.
