- Solana was testing a multi-month support level at the time of writing, following continued selling pressure and a lack of buyer interest.
- Despite the weakening price, on-chain data remained positive, with development activity on Solana up 33% month-on-month.
Solana [SOL] fell nearly 4% over the past 24 hours, with the bearish trend in the broader cryptocurrency market influencing further headwinds. At the time of writing, the token was trading at $139.
SOL has posted the biggest decline among the top ten largest cryptos by market capitalization. Trading volumes have also fallen by 12% per CoinMarketCap data, which points to reduced market interest and a lack of conviction among traders.
With Solana testing a multi-month support level, is a bullish reversal imminent, or will the bearish trend continue?
Reduced buyer interest
Solana’s technical indicators indicate a lack of buyer participation. The Chaikin Money Flow (CMF) on the four-hour chart has been hovering in negative territory since the beginning of this week.
This trend indicated continued selling pressure and a lack of sufficient interest from buyers to absorb the tokens dumped on the market.
The weak buying momentum around SOL is also visible in the Relative Strength Index (RSI). The index was at 33 at the time of writing, meaning there was bearish momentum.
The RSI has formed lower lows over the past week, indicating that bears have the upper hand. However, the RSI line now attempted to make a bullish crossover above the signal line.
The potential crossover also coincided with two consecutive green candles after the price bounced after testing multi-month support at $138. Solana has maintained this support level since mid-August.
Source: TradingView
If Solana rebounds from this support as it has in the past, bulls will target the immediate resistance at the Fibonacci level of 0.382 ($146).
The other important level to keep an eye on is USD 152 as SOL needs to break above this price to confirm an uptrend. If the uptrend fails, SOL may consolidate and trade within a certain range before deciding on the next trend.
Solana shows strength
While the price action remains bearish, Solana’s on-chain metrics paint a bullish picture.
According to a recent post from X (formerly Twitter) of Santimentthe Solana network has posted the highest month-on-month increase in total development activity.
This activity increased by 33%, which is a positive sign of the growth and improvement of the network.
Source:
Data from DeFiLlama also showed an increase of over $1 billion in Solana’s Total Value Locked (TVL) over the past month, despite pricing headwinds.
Read Solana’s [SOL] Price forecast 2024–2025
Nevertheless, the positive network numbers did not do much to convince long traders.
The Long/Short Ratio is also below 1 Mint glass showed that short traders dominated Solana’s price action for most of the week.