Solana (SOL) price has been facing significant challenges in breaking above key resistance levels. In August, the cryptocurrency made two failed attempts to breach the $160 mark within the same month.
Despite these setbacks, there is a potential for recovery once investor sentiment shifts. However, the possibility of Solana falling back to $126 remains a concern.
SOL Traders were largely prepared for a drop in Solana’s price, especially as the funding rate shifted from positive to negative around August 28. This shift indicated that traders were betting on further declines, anticipating a drop to $126. The consolidation range that has formed between $126 and $160 has become a focal point for traders.
Furthermore, the broader macro momentum for Solana is also showing signs of strain. Technical indicators like the Relative Strength Index (RSI) suggest that bearish momentum is currently peaking. However, the RSI has historically bounced back from similar ranges, indicating that the selling pressure could soon ease. This potential slowdown in selling could provide the necessary room for Solana to begin a recovery.
While the RSI indicates that Solana is nearing oversold territory, this does not guarantee an immediate recovery. Solana’s price has declined by more than 20% in the past eight days after failing to breach the $160 resistance level. This significant drop makes it likely that Solana will revisit $126 before any substantial recovery occurs.
Additionally, the $126 to $160 range has been tested multiple times since mid-April, creating a well-defined consolidation zone. Even if Solana manages to recover, failure to break through the $155 or $160 resistance levels could result in another decline, making a drop to $126 a likely scenario. However, if Solana’s recovery coincides with positive market cues, there is a chance of breaching the $160 resistance.
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