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Solana (SOL) has struggled to maintain momentumafter a rally that saw it peak around the $183 level on May 14. Since then, Solana’s price action on the 4-hour chart hasn’t given a clear direction, with the cryptocurrency pulling back to retest a key support zone near $166. Related Reading Analysis: Crypto Heats Up As $35 Billion Enters Market In Under A Month 3 days ago
At the time of writing, Solana is trading around $169.43, up slightly by 0.70% on the day, as it attempts to defend this crucial support level and build a foundation for another upward move. Interestingly, a technical outlook on the TradingView platform has pointed to the paths Solana might take in the coming days. $166 Support Holds Repeated Tests, Break Above $177 Or $183 Will Be Bullish
According to a recent analysis postedby TradeCityPro on TradingView, the $166.82 level is serving as a key short-term pivot for Solana. After a bullish leg that began at $142.25 and extended to $177.51, the asset experienced a fake breakout attemptbeyond that resistance and was swiftly rejected at $183.86.
This rejection brought the price back below $177.51 and into a retest of the $166.82 region. Notably, this support level has been tested twice so far and has held firm. The 4-hour chart is showing strong bullish candles forming around $166, which is an indication of a strong buying interest at this price level.
Keeping this in mind, a breakout above either the $177.51 or $183.86 resistance would be the go ahead for a long position, especially if accompanied by the formation of a higher low and higher high beforehand.
Until such a breakout occurs, the current setup is one of indecision. A successful breach and daily close above $177 backed by rising volume would likely set the stage for another movetoward the $190 to $200 region for Solana.
Chart Image From TradingView Short Trade Also Valid Below $166 Support Zone
Market volume, however, has declined from last week’s levels.At the time of writing, Solana’s 24-hour trading volume is $2.3 billion, a 36.15% decrease from the previous 24-hour timeframe. As such, a new wave of momentum will be required to drive Solana through the resistance levels at $177 and $183. SOL is currently trading at $171. Chart: TradingView
For now, the Solana price is consolidating tightly above $166, and failure to hold this level could open the door for a retest of the deeper $142.25 support. Related Reading ‘Judgment Day Is Coming’—XRP Set To Explode, Analyst Warns 1 day ago
If bears gain control and push the price lower, the next significant demand zone lies back at $142.25, which is the origin point of the previous bullish move. Given how the price reacted from this level earlier on April 30 and on May 6, it is expected to act as a strong support again if tested.
At the time of writing, Solana is tradingat $171. up by 1.6% in the past 24 hours.
Featured image from Unsplash, chart from TradingView