Solana Faces Short-Term Downside as Price Tests Critical Support Zone
Key Summary
Following the release of September's CPI data, Solana's price has fallen by 5.10% to $102.19, with bearish momentum evident on both the daily and 4-hour charts. The altcoin is trading in the key $100-$105 support zone, which could see further downside if buyers fail to hold the area.
Introduction
SOL traders are in a tricky position right now. The wider crypto market took a beating following the release of September's CPI data, which came in hotter than expected at 3.7%. This has led to a significant decline in Solana's price.
Market Analysis
The altcoin fell by 5.10% in 24 hours to $102.19 at press time. With bearish momentum evident on both the daily and 4-hour charts, SOL may see further downside before any recovery. At the time of writing, the daily chart was still very much in bearish territory, with no signs of a reversal.
Technical Indicators
SOL's price broke below the 23.6% Fib retracement level, an area it has traded in since mid-September. The altcoin is in the key $100-$105 support zone. If buyers can't hold that area, then a daily close below $100 would expose SOL to the next major support zone at $96.
Momentum Indicators
The MACD was below both the zero and signal lines, indicating that bearish momentum was dominant. Meanwhile, the OBV had turned lower, suggesting that buying pressure was weakening relative to selling activity. In fact, neither indicator seemed to suggest that the downtrend was losing strength.
Conclusion
Despite bearish signals on the four-hour chart, the daily chart showed SOL holding within the premium range around the 50% Fibonacci level. This might offer broader context for a potential recovery, despite short-term momentum being bearish.