SOL at Key Levels: Breakout or Rejection Ahead?

Solana (SOL) rose about 2% on Monday, recovering slightly after dropping nearly 5% over the past four days. However, overall sentiment remains weak. Institutional interest declined on Friday, with roughly $7.8 to $8 million pulled from Solana ETFs. Meanwhile, data from derivatives suggests a bearish tilt, as funding rates are negative.

In derivatives trading, around $23 million worth of positions have been liquidated in the last day, mostly long positions valued at about $19 million. This indicates that bullish traders were forced out. The negative funding rates (around -0.0141%) show that shorts are currently more dominant, with traders leaning toward further price drops.

Technically, SOL is still in a clear short-term downtrend. Prices have been making lower highs and lower lows since peaking near $95, and the descending trendline remains a resistance level.

The bounce from the $80 to $79 demand zone appears weak. Buyers did step in, but the lack of strong momentum suggests this might be more of a temporary relief rally than a real turnaround.

Key levels to watch include resistance at $85.9, $88.5, and $91.2, which coincide with supply zones and moving averages. Support is around $80 to $79.4—this demand zone is crucial. If prices drop below that, the next potential target is roughly $75.

Indicators continue to lean bearish. SOL is trading below key moving averages, signaling seller control. The MACD is attempting to turn bullish, but momentum remains subdued and hasn’t expanded yet.

In summary, the bias stays neutral to bearish. This looks like a short-lived bounce within a downtrend, not a confirmed reversal.

If SOL holds above $80 and breaks through $86, it might head toward $88 to $91. But the more likely outcome is a rejection near $85 to $88, followed by a decline back toward $79, possibly even $75.

The overall trend hasn’t shifted. Until SOL breaks above $91 and makes a higher high, upward moves are likely to face resistance. This remains a market where rallies get sold off rather than a sign the bottom has been reached.

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