Solana (SOL) Drops 15% as Bearish Sentiment and Technical Indicators Weigh

Solana (SOL) is currently facing a critical juncture as it hovers near its pivotal support levels, with market sentiment turning bearish. The cryptocurrency is dangerously close to the $125–$110 support range, a zone that traders believe will determine its immediate fate. If SOL fails to hold above this level, it could lead to a significant price correction, potentially dropping towards $100.

Technical analysis indicates that Solana is positioned precariously above its significant support zone. Maintaining this support is vital for establishing a potential rebound. However, a breach below $110 may open doors for a deeper correction, likely taking prices towards the $95–$100 area. Resistance levels are charted at $140 and $150, where significant selling activity has been previously recorded. A robust bullish outlook is contingent upon SOL reclaiming the 50-day Simple Moving Average (SMA) currently positioned at $188.74—a critical threshold that could pivot market momentum back in favor of buyers.

Technical indicators suggest a cautious outlook for SOL despite being positioned to bounce back. The Relative Strength Index (RSI) sits at 35.11, just above the oversold territory, implying a possibility of a relief rally. However, it concurrently indicates lackluster bullish momentum. The Moving Average Convergence Divergence (MACD) shows it in the bearish realm, with the signal line below the histogram—implying persistent selling pressure and sluggish upside potential. Additionally, the On-Balance Volume (OBV) standing at 63.75M hints at decreasing buying interest, indicating that a substantial reversal may lack solid volume support.

The recent decline in Solana’s Open Interest (OI) since early March indicates a reduction in speculative trading interest. This trend aligns with a significant drop in SOL’s price, implying that traders are closing their futures positions amid increasing apprehension. Several factors have fueled this downturn. Solana encountered significant resistance near the $180 mark, prompting traders to take profits. Additionally, market dynamics were impacted by the recent crypto reserve plan, which fell short of trader expectations, resulting in a widespread sell-off across the crypto landscape.

Concerns are further compounded by the potential unlocking of FTX estate tokens, which may lead to increased supply