Is Solana’s $160-level Struggle a Sign of Recovery or More Trouble Ahead?

Solana’s $160-Level Struggle: Can Bulls Break Through or Is There More Trouble Ahead?

Solana (SOL) recently faced rejection at the key $160 resistance level, raising questions about its future trajectory. Despite high user activity metrics in recent weeks, a deeper dive reveals that a significant portion of this activity comes from MEV (Miner Extractable Value) bots, potentially compromising the user experience. As SOL struggles to break past the $160 barrier, what’s next for the cryptocurrency?

Imbalance Forces Bulls to Retreat Toward $120

The higher timeframe market structure of SOL was bullish following its March rally to $210. However, the recent retracement created a bearish internal structure. The rejection at the fair value gap near the $160 resistance level highlighted weak bullish sentiment. The RSI on the 1-day chart remained below neutral 50 for most of April, indicating strong bearish momentum. Similarly, the On-Balance Volume (OBV) has been on a downward trend since mid-March, hinting at further losses if it breaks below its local support level.

If the OBV drops below this local support, it could signal a deeper decline, potentially bringing Solana prices to the $98.38 swing low or even lower. However, the $122.38 Fibonacci support level could provide a positive response, offering some respite for the bulls.

Potential Bullish and Bearish Targets Based on Liquidity Pools

Technical analysis suggests that Solana’s price could see support around the $132 and $125 regions, as indicated by liquidation heatmaps. These liquidity pockets may act as short-term support zones before any upward movement. To the north, the psychological $150 level and the $160 level are key magnetic zones where bulls might take profits.

However, Bitcoin volatility could trigger a wave of negative sentiment, pushing SOL below the $122 mark. Traders should be cautious, as this could invalidate the idea of a bullish recovery. Despite this, a swing trading opportunity exists targeting $160, with a drop below $122 serving as a critical point of invalidation.

Conclusion: Navigating Solana’s Uncertainty

Solana’s path forward is marked by uncertainty. While the higher timeframe structure remains bullish, the internal structure has turned bearish. Investors should closely monitor key levels and indicators like the RSI and OBV to gauge potential price movements. A successful push past $160 could open the door to further gains, while a drop below $122 could signal more trouble ahead.

For now, traders and investors should keep an eye on the broader market sentiment and be prepared for volatility. Solana’s journey to recovery may depend on its ability to withstand external pressures and regain its upward momentum.