Solana’s (SOL) 7% Rally Could Unwind as Traders Bet Against Uptrend

Solana has posted a 7% increase in the past 24 hours, aligning with the broader market’s recovery. While this surge may appear promising, technical and on-chain data suggest that the coin could face significant resistance. 

Despite the recent rally, SOL risks shedding these gains and could fall below the $100 mark if bearish pressures dominate.

Solana’s Price Surge Lacks Momentum

While impressive, SOL’s current rally largely reflects the broader market trend rather than demand for the altcoin. The bearish divergence formed by its Chaikin Money Flow (CMF) shows this.

At press time, SOL’s CMF is below the zero line at -0.09, indicating a lack of buying momentum among SOL market participants. 

The CMF indicator measures money flow into and out of an asset.  A bearish divergence emerges when the CMF is negative while the price is climbing. The divergence signals that despite the upward movement, there is more selling pressure than buying interest, suggesting weak bullish momentum. 

This indicates that SOL’s current price rally may lack sustainability and could be at risk of reversing or stalling as new demand remains scarce. 

Further, the coin’s long/short ratio highlights that its market participants lean more heavily toward the short side. At press time, this stands at 0.97.

The long/short ratio measures the balance between long positions (betting on price increases) and short positions (betting on price decreases) in the market. When the ratio is below zero like this, it indicates that there are more short positions than long positions.

This suggests that bearish sentiment remains dominant in the SOL market, and its futures traders are anticipating a decline in the asset’s price.

Solana in Crucial Zone: Will $95 Hold or Lead to a Steeper Decline?

During Monday’s intraday trading session, SOL plummeted to a 12-month low of $95.26. Although it has since rebounded to trade at $108.77 at press time, the lingering bearish bias leaves the coin at risk of shedding these gains.

If SOL witnesses a pullback, it could break below the support at $107.88. If it falls back below $100, the coin’s price could fall toward $79.

On the other hand, if the uptrend continues, backed by a surge in new demand, SOL’s price could breach the resistance at $111.06 and climb toward $130.82.