The cryptocurrency market has witnessed a significant downturn, with Solana being one of the worst-hit digital assets. According to market data, Solana’s price fell to $134 on Tuesday, extending its weekly decline to a staggering 13.4%. This downturn has been attributed to a combination of factors, including a broad crypto sell-off and the breakdown of key psychological support levels.
Solana’s Price Plummet
Solana’s price has been on a downward trajectory, with the digital asset falling below a crucial psychological support level. This breakdown has triggered automated selling, accelerating the decline towards the lower end of the recent trading range. The cryptocurrency’s trading volume has also taken a hit, falling by 26.7% in 24 hours, which indicates lower market participation during the downturn.
The decline in Solana’s price has been accompanied by a general weakness in the cryptocurrency market, caused by Bitcoin price pressure and outflows from exchange-traded funds. At the time of writing, Solana was trading at around $134, down 4.6%. The digital asset’s price movement can be seen in the chart below, which illustrates the breakdown of key support levels and the subsequent decline.
Source: CoinGecko
Technical Analysis
From a technical analysis perspective, Solana’s charts show clear breakdowns on both the 4-hour and daily time frames. The digital asset has slipped below every major short-term moving average, and even the modest 7-day trendline is now acting as a ceiling rather than a floor. The MACD is still firmly in the red, although it is gradually trending higher, which could be an indication that selling momentum may be weakening.
Analysts warn that Solana is relying on its next real safety net, a support zone that it last held on to at the end of October. If this level is not maintained, the decline could deepen. A reversal would require a daily close above the seven-day simple moving average, according to technical analysts. Without reclaiming this level, price advances are expected to face rejection and possible pullbacks towards previous support zones.
Market Sentiment
Short-term sentiment in the altcoin market remains weak, with Solana’s recent ETF inflows and ecosystem developments failing to offset the current market-driven decline. Despite the launch of a Solana ETF on Nasdaq by VanEck, which offers institutional access with initial fees waived and staking rewards passed on to investors, the digital asset’s price continues to decline. Grayscale’s spot Solana fund, launched in late October, has also failed to stem the decline, despite quickly raising significant assets after a fee cut and sharing the staking returns with investors.
The cryptocurrency is approaching oversold conditions on shorter time frames, although bulls need to retake the seven-day simple moving average to invalidate the bearish technical structure, analysts said. As the market continues to evolve, it remains to be seen whether Solana can recover from its current downturn and regain its footing in the cryptocurrency market. For more information on Solana’s price movement and the broader cryptocurrency market, visit https://crypto.news/solana-sinks-through-support-level-in-broad-crypto-sell-off/
