Solana (SOL), the fifth-largest cryptocurrency by market cap, is facing downward pressure as indicated by its daily chart showing a warning sign. As of December 3, 2024, the overall sentiment in the cryptocurrency market appears bearish, with most assets struggling to gain momentum.
Technical analysis of Solana (SOL) reveals that it has failed to maintain its crucial support level and has slipped below the $227 mark. After reaching its all-time high, SOL entered a consolidation phase, forming a bearish head-and-shoulders pattern. The latest price action suggests that if SOL closes a daily candle below the $226 level, there is a high likelihood of a 10% decline towards the $200 mark in the near future.
Despite the bearish outlook, on-chain analytics firm Coinglass reports a significant outflow of $159 million worth of SOL from exchanges in the past four days. This outflow indicates that whales and institutions are showing confidence in the altcoin, withdrawing tokens to their wallets, which is generally seen as a bullish sign.
In terms of current price momentum, SOL is currently trading around $222, with a 6.55% decline in the last 24 hours. However, trading volume has increased by 101%, suggesting increased participation from traders and investors.
Looking ahead, SOL remains above the 200 Exponential Moving Average (EMA) on the daily timeframe, signaling an overall uptrend. Additionally, the Relative Strength Index (RSI) is near the oversold zone, indicating a potential upside rally in the near future.
In conclusion, while Solana (SOL) is currently facing downward pressure, the outflow of tokens from exchanges and technical indicators suggest a possible reversal in the coming days. Traders and investors should closely monitor key levels and market developments to make informed decisions.