Despite Bitcoin and Ethereum showing minor signs of recovery on Monday, Solana fails to break key immediate resistance. The intraday charts show SOL making minor gains over the past 24 hours with an immediate and stiff resistance at $136. At press time, it is exchanging hands at $133.
Looking at the monthly chart, SOL is trading in an uncharted territory with no immediate support until $110 from where it managed to bounce back without any notable retracement since Aug 6.
It is important to note that in the last 30 days, Solana had not dropped below $140 (it quickly bounced back after dropping to $110) which acted as a key support level. Analysts then saw a bullish flag pattern and predicted an uptrend while describing SOL’s overall price action to be in a “consolidation phase, between $110 and $200.”
However, once Solana broke its key support at $140, it quickly slipped under $127 losing over 18% last week – the most amongst the top 10 coins by market cap that were all red.
Source: TradingView
Solana Price Prediction: Will It Drop Another 20%?
Over the last 24 hours there has been an increase in Open Interest (OI) data for Solana with more short positions being created. An increase in OI data demonstrates an influx of fresh funds – however, with dominant short positions, it is unlikely that there is any change in the negative market sentiments diminishing the probability of a SOL price reversal.
Further, the uncertainty over the expected Fed rate cuts and US elections, can spur a quick sell-off if the negative sentiments continue. There’s a huge contrast between SOL’s daily and 30-day technical indicators including RSI (Relative Strength Index) and Moving Averages.
While the 30-day RSI and Moving Average suggest a strong buy, the daily data is a strong sell. Therefore, the price action and support and resistance levels seem to offer more credible insights into where Solana prices are headed to in September.
$140 and $125 would be the key levels to watch for. Considering $125 being the lowest price for SOL in the last three weeks, any further downward price action below $125 could push Solana southwards – nearly 20% from its current levels to $110 with no immediate support in between.
If Solana manages to push past $140 we may get to see an upward push. However, at the current levels, and with the dominant short positions building up, a reversal seems highly unlikely.
