SOL Price Keeps Facing Extensive Weakness And Selling Pressure
This period is the first time SOL price will be facing this enormous bearish bias and intense selling pressure in the last 12 months. The uncertainties regarding Russia’s invasion of Ukraine are negatively impacting the crypto markets globally.
SOL Price Seeks New Support
SOL price has been experiencing a 5-month low daily close ever since hitting similar levels in august 2021. The daily close for Feb. 21 and the selling pressure closed on top of the 0.162 Fib. retracement level, which corresponds to the $82.26 price level. Analysis of the volume profile for this year shows that it is at its 12-month low. Thus, indicating a downtrend in the wide-open range and price discovery indicators.
But, an extension of the 2021 volume profile indicates a significant volume node at the $75 level (the level representing a robust psychological barrier for SOL price movement). The bears may likely intensify efforts to push down the SOL price at this level.
Reacting To Geopolitical Events
The initial reaction from any volatile or semi-volatile market that faces similar geopolitical events is enormous volatility, bearishness, and violence. Hence, it is no wonder that futures, shares, futures, cryptos, and a few commodities are experiencing bearishness right now. However, there is often a swift and almost-instant reverse to equilibrium when there are no more uncertainties, and there is a balance in the status quo.
SOL/USDT daily chart. Source: TradingView
SOL’s bullishness can start from accomplishing a couple of small short-term uptrends. For instance, the first small short-term uptrend for SOL is the $94 level, corresponding to the 0.50 Fib. retracement level and the 24-hour Tenkan Sen.
Solana TVL Declines By Nearly 55% In Three Months
The latest Defi Llama data shows that the TVL in Solana was close to the $15B mark as of December 2021 but is now about $7B. It further predicts that a decline in the TVL below this mark might lead to intense selling pressure as the bears will seize control of this digital asset.
There have also been declines in the TVLs of other digital assets, notably Ethereum and Terra. However, none is as profound as Solana’s TVL decline rate. The substantial decrease in SOL’s TVL is similar to the decline in crypto markets, with the crypto total market cap dipping from $3 Tr. To $1.6 Tr in the last two months.
But an additional weakness in SOL price coupled with a loss in market share to the competition is a further indication of bearishness. Any project that will gain a foothold in the crypto space requires momentum as there is intense competition among several crypto projects to acquire and retain momentum.
The project with the most staying is the one that attracts the most TVL. Others will likely be forgotten quickly. Hence, bulls will need to make intense efforts to ensure that SOL’s TVL doesn’t drop below the $7B mark. Otherwise, SOL will be under massive selling pressure. As of this writing, SOL trades at $85.30.
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