An altcoin correction extended to a fresh week after Bitcoin slipped below $33K for the first time since July 2021. Smart contract operator Solana was at the receiving end of yet another drawdown and coughed up a 20% decline over the last 24 hours at press time.
Solana 4-hour time frame
Over the last three days, only 3 green candles have been spotted on Solana’s lesser time frame as sellers have raised a ruckus in the market. The recent bouts of sell pressure have seen SOL slip below an important demand zone between $125 and $140 and head towards a support area between $82 and $68.5. A buildup phase within this support would provide bulls with a small window of opportunity to establish a rebound. A close above the 4-hour 20-SMA (blue) would be a step in the right direction but SOL would have to flip its earlier demand zone back to support for a more conclusive recovery.
Meanwhile, bears would be able to inflict more damage in case of a close below $58. Any long setups should be avoided in such an outcome.
Indicators
Since broader FUD was driving SOL’s losses, an oversold RSI would continue to be discounted until solid support is found. Similarly, the MACD was unable to climb back from its lowest ever point after sellers negated a bullish crossover. Trading outflows were also captured on the Chaikin Money Flow. The CMF, which measures market strength or weakness, was amidst a downtrend after hitting a 2-month low less than 24 hours ago.
Conclusion
Since the indicators were in a dire state, traders should maintain caution while trading with SOL tokens. A safer call would be to stay put and observe how SOL reacts within a support zone between $82 and $68.5 before taking any long positions.