By Chris Hollingworth 
Solana Facing Bearish Pressure: Importance of $118 Support Level
Solana (SOL) is currently under significant bearish pressure, struggling to uphold crucial support levels. The once high-flying altcoin has transitioned into a downtrend, prompting concerns that a failure to hold the $118 support level may lead to a further correction, potentially pushing the price downwards to the $100-$90 range.
Market sentiment has shifted, and the mounting selling pressure raises questions about whether Solana is on the verge of a major breakdown or if the bulls can defend this critical zone. Let’s delve into the technical analysis and market outlook to understand the current scenario.
The Importance of the $118 Support Level
In recent weeks, Solana has displayed signs of weakness as it grapples with maintaining its bullish momentum. The $118 mark has emerged as a pivotal support area, with previous attempts to rally from this level being met with selling pressure.
Key bearish signals to watch include lower highs and lower lows, indicating a classic downtrend formation, declining trading volume suggesting weakening buying interest, the Relative Strength Index (RSI) dropping below 50, signaling bearish momentum, and an increase in exchange inflows, hinting at more SOL being sent for selling.
A breach below $118, accompanied by substantial volume, could trigger a cascade of liquidations, potentially accelerating a decline towards $100 or even lower levels.
Factors Contributing to Solana’s Struggles
1. Market-Wide Altcoin Weakness: The rising dominance of Bitcoin has been diverting liquidity away from altcoins like Solana. Altcoins typically endure sharper declines when Bitcoin consolidates or corrects.
2. Profit-Taking by Whales & Early Investors: On-chain data suggests that significant holders have been offloading SOL, likely capitalizing on profits from the 2023 rally. This profit-taking behavior by whales may exert further downward pressure.
3. Network Congestion & Performance Challenges: Despite being a promising blockchain network, Solana has encountered intermittent congestion issues. These technical glitches can impact investor confidence, particularly among traders seeking stability.
4. Macroeconomic Factors: Uncertainties surrounding interest rates, inflation, and regulatory actions are weighing on risk assets like cryptocurrencies. If broader market conditions deteriorate, Solana could experience additional downside pressure.
Potential Scenarios for Solana
Bullish Scenario: Successful Rebound from $118 Support
If buyers successfully defend the $118 support level, a short-term relief rally towards $135-$140 could materialize. A retest and recapture of key moving averages might restore bullish momentum, while a broader recovery in the altcoin market could also support Solana’s resurgence.
