Solana Must Hold Above Crucial $78 Level – Analyst Explains Why

Data from CoinMarketCap shows that Solana (SOL) has registered no significant net price change in the last month. However, daily price analysis shows that the prominent altcoin reached a local peak near 97 in early May before entering its current downtrend. Presently, the Solana market is dominated by bearish sentiment, alongside the broader market, as indicated by its weekly price loss of 4.09. In an X post on May 30, renowned market analyst Ali Martinez shares a key insight on the Solana market, highlighting a horizontal channel formation on the daily chart. For context, the horizontal channel is formed by two flat, parallel lines that act as support and resistance, within which the price moves sideways. It is usually indicative of a market in consolidation, where a breakout above resistance (the upper boundary) is a bullish signal, and a breakdown below support (the lower boundary) is a bearish signal. Related Reading: Solana Clings To Critical Multi-Year Support As Breakout Pressure Builds Solana Near Pivotal Price Point: Will Market Climb To 87 Or Retract To 58? According to Martinez’s analysis, Solana has remained within its current horizontal channel since early February. During this time, the altcoin has consistently established its resistance around 97.79, following two retests in March and April. Meanwhile, the channel’s support lies around a critical 78.17 level, driven by price visits in February and April. Following the recent price rejection at the upper boundary in May, Solana is headed for its usual support at 78.17, with present prices hovering around 83. Martinez explains that market bulls must ensure the common support line holds to preserve the range-bound structure. In this case, a bullish scenario would be a successful retest of 78.17, with price then returning to the mid-range of the horizontal channel at 87. On the other hand, a negative case would be a breakdown below the highlighted support level. Martinez explains that such a development would expose Solana to further downside, with an immediate target of 58, representing a potential 30 loss at current market prices. Related Reading: Bitcoin Recovery Rally Or Bull Trap? These Key Levels Hold The Answer Solana Market Overview At press time, SOL trades at 82.91, following a minor 0.22 gain in the last day. Meanwhile, the daily trading volume is down 33 to 2.22 billion. These metrics suggest that a non-eventful market, driven by a decline in participation and transaction count. Notably, data from SoSoValue show that US SOL Spot ETFs have maintained a net weekly positive performance for the fourth consecutive week. However, net inflows have trended downward since peaking at 58.12 million in the second week of May. These figures reached 2.36 million in the fourth week of May, representing a 84 decline from the 15.63 million recorded in the third week. Featured image from iStock, chart from Tradingview