Solana price has seen a considerable drop over the last week as the crypto markets continue to bleed. While this descent might seem bearish, it has allowed SOL to reach an inflection point, allowing it a chance to make a comeback.
Solana price shed roughly 31% since January 2 and seemed to set a base at a weekly support level – $135.71. However, yesterday’s sell-off pushed SOL below the said barrier and well below the 200-day Simple Moving Average (SMA) at $135.16.
Investors should note that the weekly support level and the 200-day SMA are inside the daily demand zone, extending from $115.51 to $144.70. Hence, this cluster of support levels is a strong confluence that bears are unlikely to sustain a breach.
Hence, market participants can expect Solana price to kick-start a 25% uptrend to retest the lower limit of a daily supply zone, ranging from $169.79 to $179.19. The January 6 swing high at $154.32 might pose a temporary blockade, but bulls are likely to push through it.
In some cases, Solana price could retest the weekly resistance level at $174.37 present inside the daily supply zone, bringing the total climb from 25% to 28%.
SOL/USDT 4-hour chart
While things are looking up for Solana price, a four-hour candlestick close below the daily demand zone’s lower limit at $115.51 will create a lower low. This development will skew the odds in the bears’ favor and invalidate the bullish thesis for SOL. In this situation, Solana price could revisit the $110.35 support level.
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