Solana – Already down by 21%, but is another 10% drop coming up?

• SOL broke out beneath the $87-$90 support zone
• The VRVP tool demarcated two demand zones to the south

Solana [SOL] prices fell below the $90-support zone. Throughout January, Solana bulls have battled to defend the $87-$91 demand zone. Bitcoin’s [BTC] latest drop below the $40.2k-support level saw SOL bears emboldened.

AMBCrypto recently reported that the monthly stablecoin transfer volume hit a record high of $316 billion and counting in January. Meanwhile, the token’s market sentiment in the short term has been strongly bearish.

Using the VRVP tool to find support and resistance zones

The 12-hour price chart for SOL showed that the market structure has been bearish since 6 January. The bulls were unable to flip the structure bullishly, which required a session close above $108.15.

Source: SOL/USDT on TradingView

The RSI has moved below neutral 50 since 18 January. Together, the structure and momentum showed that the bears have been in control. The OBV has dipped slightly lower over the past week, which pointed to a higher selling volume in recent days.

The Visible Range Volume Profile (VRVP) tool underlined that the $71-$76 zone was an important support zone. On the other hand, the $77-$90 area has much lower trading volume. This is a sign that the prices would move through this region rapidly.

Further south, the $56-$62 area has the most volume in the visible range. The Point of Control (red) sits at $57.8, marking it as a critical support level based on the past 14 weeks of trading.

Selling pressure and market sentiment point towards further losses

Source: Coinalyze

The Open Interest has slowly declined since 19 January. The price of Solana has also fallen rapidly too. Together, they showed that traders have preferred to stay on the sidelines as the downtrend intensified.

How much are 1, 10, or 100 SOL worth today?

The spot CVD has also trended firmly south in the past four days. Alongside the OBV, this indicator is another sign of growing selling volume. Together, the price action and indicators suggest that a fall towards $70 is likely.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.