Cryptocurrency Solana (SOL) is approaching a critical level with resistance at $160 and price support at $120 on that daily chart, according to CoinMarketCap. On-chain data also suggests traders are clustering at these levels, impacting volatility.
While some investors anticipate a breakout, slowing trading velocity raises concerns over a potential pullback. Will Solana sustain its momentum, or is a correction imminent? Currently ranked #6 with a market capitalization of $73 billion, Solana is up 7% and 12% in the daily and weekly chart, respectively, according to CoinMarketCap.
The boost comes amid an overall positive market momentum. Bitcoin and Ethereum also went up 2% and 3%, respectively, in the past day. Overall, the crypto market has gained 2% to $2.85 trillion in the past day.
Solana Daily Price Chart, Source: CoinMarketCap
Buyers Defend Support at $120, But Risks Remain
Solana has encountered a formidable barrier at $146, where approximately 27 million SOL are held, according to Glassnode data. Many investors bought at or near this level and may sell to break even, reinforcing the resistance.
Additionally, another resistance cluster at $144 on the daily chart. These two zones present a significant hurdle for a sustained rally unless Solana sees a surge in buying momentum. Technically, should the price fail on a further uptrend, Solana risks a drop toward the $75-$115 range. A break below $100 could accelerate selling, as liquidity in lower price ranges remains thin.
Another factor adding uncertainty to Solana’s price action is its declining velocity, which has reached a five-month low. Velocity measures how frequently SOL changes hands, and a decrease suggests waning investor engagement.
SOLUSD Chart, Source: TradingView
Market Reaction and Broader Outlook
Solana has surged from a low of around $130, with trading volume skyrocketing 143% to $3.5 billion. However, Solana must first overcome immediate resistance before a more significant rally can materialize. As of now, it remains range-bound between $144 and $120.
Solana’s next move depends on whether it can break past $144 or hold above $120. If momentum builds, a push above resistance could signal the start of a new uptrend. Conversely, a break below key support levels may lead to further downside. Whether Solana will soon reach $1000 depends on trading volume and market sentiment.
