Solana Faces Liquidation Battle Near $120 With Long-Term Upside Still Alive

Solana (SOL) continues to trade in a sensitive technical zone, with price hovering around $123 on the weekly chart. Analysts observing the market see this stage as a brief pause in a strong market movement but not yet a reversal.

Rose Premium Signals said that despite the bearish trend, the monthly market still appears to be positive, with market indicators pointing towards buying activities and formations that tend to precede large market movements. Based on this scenario, targets were projected at $325, $437, and $545.

Source: X

However, simultaneously, there are signs of pressure in current market actions. SOL has breached levels below the 20-week and 50-week exponential moving averages, which were $159 and $166, respectively. This indicates that the downward pressure on SOL is also removing momentum in the short and mid-term.

Nevertheless, the overall scenario has not derailed. The 200-week EMA, presently around $123, gives SOL a solid foundation. As long as SOL remains in this range, technically, the long-term trend is very much alive.

Source: Tradingview

Also Read: Solana (SOL) Holds Critical Support Near $128, Next Price Move in Focus

Solana Long-Term Structure Holds as Resistance Builds Above

In a broader perspective, Solana is seen to be trading under critical levels of support, including the 0.786 level at $138 to $141. It has not recently managed to recover above the 0.618 level at $160.

Critical levels of support are also found to align with the 20-week and 50-week averages, thus presenting a robust level of resistance in the range of $150 to $166.

Source: Tradingview

The momentum indicators reflect steady selling, not a panic sell-off. The RSI for the week is approximately 36, close to the oversold levels. It implies that sellers are working, but their momentum is gradually waning.

Also, in the past, such levels tended to result in a sideways or a mild correction when the markets reached the long-term averages.

Liquidation Zones Could Decide the Next Move

However, in the short term, there may be risks in terms of price movements. Analyst Ted points out that there are huge areas of liquidation on both sides for SOL.

However, if it approaches the area around $126 to $130, lots of shorts might get unwound, causing the price to rise. But if it breaks $120, lots of long positions would get liquidated, leading to a drop in price to around $100 or $85.

Source: X

At the moment, Solana is facing a critical phase. As long as it remains above $120, the range-bound formation possibility and the potential rally continue intact. A close above $150 will further strengthen the bulls.

Currently, the market will continue in the range with some selling pressures, but the outlook will remain positive.

Also Read: Solana and Ethereum Poised to Explode as Tokenization Accelerates