The price of Solana (SOL) against the US Dollar is currently displaying bearish signals, struggling to break above the $20.50 resistance level. As of the latest data from Kraken, SOL is trading below $19.80 and the 100 simple moving average (4 hours), indicating a bearish trend.
On the 4-hour chart of the SOL/USD pair, a significant bearish trend line is forming with resistance near $19.90. Despite the possibility of a potential recovery, any upside movements may be limited to above $20.
Last week, SOL began its descent from a high of over $21, initiating a bearish momentum that drove the price below the $20.50 support level. The bears gained strength, pushing the price further below the $20 support mark. This bearish trend is reminiscent of the patterns observed in both Bitcoin and Ethereum.
After hitting a low of approximately $18.70, SOL has entered a phase of consolidating its losses. The coin trades below $19.80 and the 100 simple moving average (4 hours). Moreover, the 4-hour chart reveals a significant bearish trend line, with resistance near $19.90. Immediate resistance is expected near the $19.80 level and the aforementioned trend line.
The next major hurdle for SOL lies around the $20 zone, corresponding to the 50% Fibonacci retracement level of the downward move from the swing high of $21.51 to the low of $18.70. However, the primary obstacle to overcome is the $20.50 level and the 100 simple moving average (4 hours).
Additionally, the 61.8% Fibonacci retracement level of the aforementioned downward move aligns with the $20.50 resistance. Should the price close above $20.50, a potential rally could send it towards the $21.50 resistance zone, with the possibility of further gains towards $22.
However, failure to breach the $20.50 resistance could result in continued downward movement. Initial support on the downside is expected near the $19.00 level. If the bears further strengthen their position, the first major support lies near $18.80. A breakthrough below this level could lead to a decline towards the $18.20 support, with the next significant support at around $17.50.
In summary, the current price action of Solana (SOL) against the US Dollar suggests a bearish sentiment, with resistance levels hindering upward momentum. Traders and investors should closely monitor the $20.50 resistance level for potential breakthroughs that could dictate the future direction of SOL’s price. Conversely, a failure to breach key support levels may result in further downward movement.