Solana (SOL), the world’s fifth-biggest cryptocurrency by market cap, is poised for downside momentum as its daily chart flashes a warning sign. On December 3, 2024, the sentiment across the cryptocurrency landscape appears bearish, with assets struggling to gain momentum.
Amid the price correction phase, Solana (SOL) has failed to hold its crucial support level and has fallen below the $227 mark. According to expert technical analysis, after hitting its all-time high, SOL entered a consolidation phase, forming a bearish head-and-shoulders price action pattern.
In today’s bearish, or rather price-corrective, stance, SOL breached the neckline of the bearish pattern and attempted to close a daily candle below it. Based on recent price action and historical momentum, if SOL closes a daily candle below the $226 level, there is a strong possibility it could decline by 10% to reach the $200 mark in the coming days.
On the positive side, SOL is trading above the 200 Exponential Moving Average (EMA) on the daily timeframe, indicating an uptrend. Meanwhile, the Relative Strength Index (RSI) suggests a potential upside rally in the coming days, as its value is near the oversold zone.
Despite the bearish outlook, whales and institutions have shown strong confidence and interest in the altcoin, according to the on-chain analytics firm Coinglass. SOL’s spot inflow/outflow data reveals that over the past four days, exchanges have witnessed a significant outflow of $159 million worth of SOL.
In the cryptocurrency context, outflow refers to whales withdrawing tokens from exchanges to their wallets, which is considered a bullish sign and suggests a potential upside rally in the coming days.
Considering the outflow, it seems that SOL investors may be capitalizing on the current market sentiment and price decline by acquiring more assets.
At press time, SOL is trading near $222, having experienced a 6.55% price decline in the past 24 hours. During the same period, its trading volume surged by 101%, indicating heightened participation from traders and investors compared to the previous day.
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