Solana Nears Crucial Support as Bears Take Control

Key Moments

Macro Backdrop Weighs on Solana

Solana (SOL) is trading lower in line with a broader cryptocurrency market pullback after the US Federal Reserve opted to keep interest rates unchanged on Wednesday. At press time on Thursday, SOL is down 2%, extending the more than 1% decline recorded the previous day.

The Fed held its policy rate at 3.50%-3.75% on a 10-2 vote. Two policymakers supported rate cuts, while the majority indicated a preference to wait and assess conditions, which the article characterizes as signaling a likely conclusion to the quantitative tightening phase. The possibility of rate cuts later in the year is seen as a potential driver of fresh liquidity into digital assets, which could support a rebound in cryptocurrencies, including Solana.

Derivatives Data Highlights Risk-Off Retail Positioning

Derivatives market indicators for Solana show weakening retail conviction and a growing risk-off stance. According to CoinGlass data, SOL futures Open Interest has dropped 1.40% over the past 24 hours to $7.42 billion. This move is interpreted as a notable reduction in leveraged exposure or a broad clearing out of positions.

Liquidation data reinforces the bearish tone. Over the last 24 hours, long liquidations of $5.55 million have exceeded short liquidations of $1.34 million, suggesting that previously bullish positions have been unwound more aggressively than bearish ones.

At the same time, the funding rate has moved into negative territory at -0.0042%, indicating that traders entering new positions are skewed toward the short side.

These developments point to a cooling in retail speculation on Solana and align with the broader risk-off reaction in crypto following the Fed decision.

Policy and Regulatory Events as Potential Catalysts

Beyond monetary policy, the article notes that an upcoming rescheduled meeting between US government representatives, banks, and cryptocurrency industry leaders on crypto market structure could provide an additional catalyst. A positive outcome, particularly if the CLARITY bill is approved, is described as potentially supportive for the market.

Technical Picture: Focus on the $116 Level

From a technical perspective, Solana is trading below its 50-day, 100-day, and 200-day Exponential Moving Averages, highlighting a prevailing bearish structure. With SOL down 2% on Thursday and following a decline of more than 1% the previous day, attention is centered on whether price can maintain support around $116.

The $116 area has recently acted as a floor, having limited downside movement on Sunday and on December 18. A decisive daily close below this zone would expose the $100 psychological level and a deeper support level at $95, which the article associates with the April 7 low.

Momentum and Resistance Levels

Momentum indicators point to weakening, but not yet exhausted, selling pressure. The Moving Average Convergence Divergence (MACD) is positioned below its signal line, confirming a bearish momentum bias. However, the negative histogram is contracting, which suggests that downward momentum may be moderating.

The Relative Strength Index (RSI) stands at 40 and has turned lower after approaching the midline, reflecting a soft technical tone with scope for additional downside before entering oversold territory.

On the upside, Solana faces successive resistance hurdles. The first key barrier is the 50-day EMA at $133. Above that, the 100-day EMA at $144 aligns with a supply zone in the $145-$148 area.

A daily close below $116 would strengthen the bearish case toward $100 and $95, while reclaiming the 50-day EMA at $133 and the 100-day EMA at $144 would be needed to start challenging the current negative trend structure.