Solana (SOL) price sell-off accelerates — Will traders defend the $130 support?

Solana (SOL) price is down nearly 9% on the day and is close to trading below $130 for the first time since Sept. 18, 2024.

Two key indicators on SOL’s daily chart are on track to complete a bearish crossover, and if this happens, new lows under $100 could be in the cards.

The 50-day and 200-day exponential moving averages are on the verge of a “death cross,” which historically has been an ominous sign for most cryptocurrencies.

Will traders buy Solana under $130?

Based on the Fibonacci retracement analysis, SOL is currently between the 0.5 and 0.618 levels, which is considered the “golden zone.” The $130 level also acted as a strong support during the six-month consolidation period in 2024, near the 0.618 level. 

As a result, the crypto asset might consolidate and form a bottom between $130 and $150 over the next few weeks, considering the level’s historical and technical relevance.

A daily close below $130 will open the possibility of retesting the liquidity pocket between $120-$110, as identified in the chart.

The relative strength index (RSI) dropped below the 30 level for the first time since June 2023. On the previous two occasions when the RSI was this deeply oversold, it marked a trend bottom, suggesting that a price reversal or oversold bounce could occur in the short term.

Related: 3 reasons why Solana (SOL) price is 50% down from its all-time high

Is a mean reversion in play for Solana?

Due to the recent price action, Solana’s market sentiment and mindshare have taken a massive hit. Miles Deutscher, a crypto commentator, recently pointed out that the altcoin’s sentiment is at a 1-year low and that SOL is having its “capitulation moment.” 

Similarly, Santiment, a data analytics platform, signaled that most investors are currently bearish on most crypto assets, including Bitcoin, Ethereum XRP, and Solana. 

This opens the possibility of mean reversion for Solana. After a 50% correction, the likelihood of a deeper correction could be limited for the altcoin. The upcoming SOL token unlocks are well known among investors, and it’s possible that the event is already priced in. 

Related: Bitcoin price ‘top is not in’ as Wyckoff model hints at $100K retest

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.