Solana (SOL) price achieved a new all-time high on November 22 but has since been undergoing a corrective phase, currently trading 27% lower than that peak. Recent technical indicators are displaying mixed signals, with bearish momentum showing signs of easing but still dominating the market. The BBTrend, though improving from its recent low, remains in negative territory, while the DMI suggests that the current downtrend is losing strength. As SOL hovers near critical resistance at $195, its price trajectory will depend on whether bullish signals gain traction or bearish pressure intensifies.
The BBTrend indicator for Solana recently hit its lowest level since August, reaching -18.89 on December 22 and has remained in negative territory since December 21. Currently at -14.64, the BBTrend is showing signs of improvement, indicating a potential shift in market sentiment. Despite still being in the negative zone, this upward movement suggests that selling pressure might be easing as buyers cautiously re-enter the market.
BBTrend is a momentum indicator derived from Bollinger Bands, measuring the difference between an asset’s price and the midpoint of its Bollinger Bands to provide insights into trend strength and direction. With SOL’s BBTrend rising from -18.89 to -14.64, it indicates that bearish momentum is weakening, potentially setting the stage for a short-term price recovery. However, until BBTrend enters positive territory, the market may remain cautious, with subdued or range-bound price movement expected.
The Solana Directional Movement Index (DMI) chart shows that its Average Directional Index (ADX) is currently at 34, significantly lower than nearly 50 just a day ago. While an ADX above 25 signifies a strong trend, the decrease suggests that SOL’s current downtrend strength is diminishing. Despite bearish price action, the decreasing ADX could indicate fading selling momentum.
The combination of a declining ADX and nearly balanced D+ and D- in the DMI for SOL suggests that while the cryptocurrency remains in a downtrend, bearish momentum may be losing steam. This could lead to a consolidation phase or potential reversal in the short term if buyer strength increases. The closest resistance for SOL is around $195, with the potential for a price recovery if it successfully breaks this level and targets $204 and potentially $215 next.
In December, SOL’s price prediction hinges on its ability to surpass the critical $195 resistance level. Currently, the Exponential Moving Average (EMA) lines are bearishly configured, with short-term lines below long-term ones. However, the recent uptick in short-term EMAs suggests a possible golden cross, a bullish signal indicating a potential trend reversal. If SOL manages to break the $195 resistance, it could aim for $204 and beyond. On the downside, failure to hold the $183 support level could lead to further declines, potentially dropping the price to $175.
