Key Insights:
- Solana trades above $118 support, but price action shows no strong confirmation of trend reversal yet.
- A sharp dip cleared leveraged long positions before buyers stepped in near visible liquidity zones.
- Resistance between $123 and $130 continues to limit upside as trading volume remains subdued.
Solana (SOL) was trading within a narrow support area between $118.97 and $123.38. This zone is based on key Fibonacci levels, with the lower end marking the 78.6% retracement. The price touched this level recently but showed no strong reaction.
The bounce that followed unfolded in a 3-wave pattern, not the 5-wave structure often linked to a trend reversal. This suggests the move was corrective and not driven by strong buying. Until the price moves past previous resistance levels or forms a clear upward pattern, the market remains in a neutral to bearish setup.
Resistance at $129.12 and Trendline Still in Place
Two resistance levels continue to block upward progress. The first is a horizontal level at $129.12. The second is a downward trendline that has stayed intact for several sessions. Price has tested these levels but has not closed above either one.
Trading activity remains muted, with volume lower than usual due to the holiday season. This limits the chance of a breakout and keeps the price locked in its current range. Without a move through resistance, the structure remains under pressure, and sellers could regain control.
Liquidation Event Creates Short-Term Recovery
Earlier, SOL dropped sharply into the $118–$120 area. This zone showed high liquidity, and the drop likely triggered stop-loss orders from leveraged long positions. This caused a fast move lower, followed by a bounce.
CW noted,
After those positions were cleared, buyers entered near support and lifted the price back above $120. This reaction appears linked to the liquidity levels at that point, not to a broader shift in trend.
Liquidity Map Points to Nearby Resistance
Heatmap data shows large resting orders in the $123–$125 and $128–$130 areas. These zones may act as resistance as traders take profits or short near supply. Meanwhile, buy-side interest around $118 remains visible but untested again since the recent bounce.
More Crypto Online noted that while support is holding, “there has been no substantial upside reaction from this level,” casting doubt on its strength. If the price falls below $118.97, pressure could increase and lead to a deeper move lower.
Source: More Crypto Online /XDISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Source: https://coincu.com/analysis/solana-on-the-edge-will-118-support-hold/
