Solana has experienced a significant downturn, dropping to its lowest point in several months in response to the general weakness of the market. The ongoing decline of this altcoin, worsened by recent technical signals, has clouded the possibility of a rebound.
The future price movements of Solana are heavily reliant on the performance of Bitcoin, as a potential recovery of BTC could help bolster SOL's recovery efforts.
Solana investors are in need of a push. The Long-Term Holder Net Unrealized Profit/Loss (LTH NUPL) for Solana has entered into the Fear zone, indicating heightened market unease. Currently at its lowest point in 16 months, this indicator reflects the impact of the broader market downtrend on SOL investors. With long-term holders facing increasing losses, the risk of significant selling pressure grows, posing a threat of further declines.
If fear spreads among these investors, it could trickle down to retail traders. A mass exodus could amplify negative sentiment, complicating SOL's path to recovery. Unless Bitcoin stabilizes and market conditions see improvement, confidence in Solana is likely to remain weak in the short term.
Solana's correlation with Bitcoin stands at a strong 0.92. While a high correlation typically indicates a bullish trend, in the case of SOL, it acts as a bearish signal. With Bitcoin struggling to stay above $80,000, any additional weakness in BTC could drag Solana down with it.
Should Bitcoin fail to regain its footing, Solana's price may experience further declines. The altcoin's dependence on Bitcoin's stability heightens its vulnerability. Without Bitcoin reclaiming key support levels, the overall momentum for SOL is expected to stay bearish, lengthening its downward trajectory.
Solana has seen a 28% drop in its price over the last 24 hours, now trading at $128. This decline is a result of the overall bearish sentiment in the market and the formation of a Death Cross on SOL's chart last week, indicating continued downside potential unless there is a strong surge in buying activity.
While currently hovering above $120 to stabilize, SOL faces the risk of breaking below its critical support at $128 if market conditions do not improve. A failure to hold this level could lead to accelerated losses and further corrections.
On the flip side, if investors seize the opportunity presented by the lower price and accumulate, SOL could reclaim $137 as a support level. A successful breakout above this point could pave the way for a potential rally towards $155, effectively negating the current bearish forecast. The sentiment in the market and Bitcoin's trajectory will play vital roles in Solana's recovery.