Solana (SOL) has been dealing with a persistent price decline over the past few weeks amid the pullback in the broader cryptocurrency market. It is currently trading at $218.76, seeing an 8% price drop in the last seven days.
Amid ongoing sell-offs and low buying interest, SOL faces mounting pressure that could push its price below the critical $200 threshold in the near term. This analysis explains why this may be possible.
Solana sees increasing bearish pressure
On a daily chart, Solana price has been moving within a descending channel since November 23. This channel forms when the price of an asset moves between two parallel downward-sloping trend lines, indicating a bearish trend. It suggests that the price is experiencing lower highs and lower lows, reflecting sustained selling pressure.
The upper line of this channel represents resistance, while the lower trend line is a support level. In the case of SOL, it has faced resistance at $230.17 and has found support at the $200.60 price level.
Solana Descending Channel. Source: TradingView
Furthermore, the decline in SOL’s value in recent weeks has caused it to fall below its 20-day exponential moving average (EMA). This moving average measures the average price of an asset over the last 20 days, giving more weight to recent prices.
When the price of an asset falls below the 20-day EMA, it indicates a shift towards bearish momentum, indicating that sellers are gaining control. After the breakout, the 20-day EMA often acts as a resistance level as attempts to break above it may face selling pressure from traders who view it as a barrier.
In the case of SOL, this barrier forms at $227, which its price has struggled to overcome over the past six days.
Solana 20-day EMA. Source: TradingView
SOL Price Prediction: Why $200 Level Should Hold
Strengthening selling pressure will likely push SOL coin price towards the $200.60 support level. If the bulls fail to defend this zone, the price could fall to $187, a level not seen since early November.
Solana price analysis. Source: TradingView
However, if demand increases, SOL coin price could surpass its 20-day EMA resistance at $227, break above the upper trend line of its descending channel, and aim to reclaim its all-time high of $264.
