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The crypto market has seen a mixed trading week, with some digital assets gaining ground while others experience selling pressure. One of the notable performers is Solana (SOL), the blockchain platform designed for scalable decentralized applications. As investors closely watch the market, SOL finds itself at a pivotal point, with its price action hinting at potential volatility in the near future.
According to CoinMarketCap, SOL is currently trading at around $185.09, down 2.61% in the last 24 hours and has recorded a low of $181 at some point today. The crypto has a market capitalization of over $82.3 billion, ranking fifth among all digital assets. Despite the recent dip, Solana's 24-hour trading volume stands at $3.6 billion, a 22% decrease from yesterday.
SOL Data Chart (CoinMarketCap)
The circulating supply of SOL is 444,813,378 tokens, while the total supply is capped at 573,196,203 coins. These figures provide insights into the asset's distribution and potential for future growth.
Solana's price action through technical analysis reveals a crucial point in its market trajectory. On the weekly chart, SOL's candlesticks have been closing massively bullish in recent weeks, finding support at an ascending trendline until encountering strong resistance in the $201-$209 range on March 17th.
SOLUSD Weekly Price Chart (TradingView)
Since then, the price has been trading within a ranging channel, oscillating between the $209 resistance level and the $168 support zone. Last week's candlestick closed bullishly, but this week has seen bearish momentum, with prices trending towards the double support formed by the ranging channel's bottom and the ascending trendline at around $168 level.
The Relative Strength Index (RSI), a momentum indicator, currently stands at an overbought reading of 72, suggesting that prices may have a higher probability of retracing further to test the double support level, acting as a magnet pulling prices downward.
On the daily timeframe, SOL attempted a second retest of the $201-$209 resistance level on March 31st but faced rejection, similar to its previous test on March 18th. Following the rejection, the price has been trading within a ranging channel, now heading towards the crucial double support zone.
SOLUSD 1- Day Chart (TradingView)
Investors with proper risk management strategies may choose to "trade the range" as they await a breakout or a breakdown in either direction of the ranging channel. A successful breakout could potentially push SOL towards resistance levels at $240 and $260, respectively. On the other side, if the price is rejected for a third time at the $168 double support level, it may continue trading within the range until a clear breakout or breakdown occurs.
However, if the bears maintain their grip and breach the support zone at the base of the channel and the red ascending trendline, prices could potentially drop further to test support levels around the $140 zone marked white.
The daily RSI stands at 55.65, while the 4-hour timeframe's RSI is at 46.69, indicating bearish momentum in the shorter term. The ranging channel's resistance lies at the $201-$209 level, with immediate support at the $170-$165 zone.
SOLUSD 4-Hour Chart (TradingView)
While some investors may choose to "trade the range" before a potential breakout or breakdown, cautious investors are advised to maintain patience and wait for clearer confirmations from Solana's price action.
The crypto is currently in a phase of indecision and its future direction remains uncertain. Executing trades prematurely could lead to unfavorable outcomes. As the market unfolds, investors should closely monitor Solana's behavior and make informed decisions based on solid technical and fundamental analysis.
