Solana Price Analysis: Navigating Crucial Support and Resistance Levels

Solana’s price is currently caught in a tug-of-war between buyers and sellers, with key support and resistance levels dictating its near-term trajectory. Recent on-chain data paints a compelling picture of this struggle, revealing significant clusters of SOL tokens concentrated at specific price points.

Resistance: A Wall at $144 and $135

Glassnode’s data highlights a formidable resistance zone around $144. A substantial 27 million SOL – nearly 5% of the total supply – is held at this level. This concentration stems from many investors who entered around Solana’s all-time high, making $144 a crucial break-even point. Their potential profit-taking could significantly impede any bullish momentum. Adding to this resistance is another cluster at $135, holding 26.6 million SOL. Unless trading volume significantly increases, or a major bullish catalyst emerges, these levels are likely to stifle upward movement.

Support: A Strong Foundation at $112

Conversely, strong support is forming around $112. Glassnode reveals a concentration of 9.7 million SOL – 1.67% of the total supply – at this level, representing a doubling of holdings since January. This suggests long-term holders are committed to their positions, signifying a potential defense against further price drops. However, below $112, the support thins considerably. A significant gap in supply between $94 and $56 presents a potential “air pocket” – a rapid price decline if the $100 mark is breached.

Declining Velocity: A Bearish Sign

Adding to the cautious outlook is Solana’s declining velocity, which has reached a five-month low. This indicates reduced investor engagement and weaker market participation, potentially limiting any recovery even with the support at $112. The lower velocity exacerbates existing bearish sentiment, implying potential challenges in overcoming the current resistance.

Current Market Situation

At the time of writing, Solana is trading at $131, having fluctuated between $135 and $122 over the past week. The interplay between these support and resistance levels will be crucial in determining Solana’s short-term price direction.

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice.