Solana (SOL) is currently trading at a key demand level near $163, after rebounding from local highs around $183. This price represents a critical support area that could determine the direction of SOL’s upcoming price action. A loss of this level could signal a deeper correction, which would raise selling pressure and potentially push SOL to retest lower support levels.

However, top analyst Daan shared technical analysis suggesting that if SOL can maintain this green zone around $160, it could pave the way for a rebound. Daan notes that in the most sanguine scenario, SOL could maintain this support and begin a gradual climb, ultimately aiming to test a downtrend line that keeps it in check. This setup would keep SOL’s bullish structure intact, creating a potential entry point for investors expecting a rebound.

With the broader cryptocurrency market showing volatility and Solana facing this key level, the next few days will be crucial. Traders and investors are closely watching whether this demand zone can support a reversal, potentially leading SOL back towards recent highs.

Solana holds mighty despite the uncertainty

Solana (SOL) managed to stay above the key support level around $160 despite recent market volatility and uncertainty. This level is crucial to SOL’s price structure as it is a mighty demand zone that could underpin another upside move.

Crypto analyst Daan recently shared his opinion about Xrevealing that the “most bullish case” for SOL would be for SOL to maintain this “green zone” around $160, which would allow it to gradually return towards the sinking trendline that has capped recent gains.

According to Daan, another attempt to break above this trend line could likely result in a successful breakout, with the potential to push the SOL price above $200. He suggests that waiting for a breakout to be confirmed could be a wise strategy for cautious investors because even after a confirmed reversal, there is still enough room for upside. His analysis highlights confidence in SOL’s potential economic recovery, viewing this accumulation zone as a promising buying opportunity.

However, Daan also acknowledges that there is still some risk of loss. If SOL fails to hold above the $160 level, a deeper correction could occur, potentially forcing SOL to test lower support levels.

For now, the market will keep a close eye on this support level as a critical indicator of the near-term SOL trend. Staying above this value would signal strength and open the door to potential growth, while a breakdown could lead to a longer phase of declines. As overall market sentiment remains mixed, Solana’s next moves will be crucial for both traders and investors.

SOL price action

Solana is currently trading at $163 after setting a 4-hour exponential moving average (EMA) of 200, which is a critical indicator of near-term strength. Holding above this EMA signals a bullish outlook for SOL, suggesting buyers are moving in to support the price at this level. If SOL maintains momentum above the 200 EMA, it could lay the groundwork for a potential rally to recent local highs, possibly challenging the recent high near $183.

However, the key support area remains the $160 level. The loss of this support would likely create significant selling pressure, potentially pushing SOL down to the $150 level, where further demand could emerge. This zone will be closely watched by investors looking for potential accumulation opportunities as the decline could provide favorable entry points for long-term holders.

In contrast, a mighty rally above current demand levels would confirm renewed upward momentum, paving the way for SOL to meet its target and possibly surpass recent highs. As SOL oscillates around this key technical zone, investors will be on the lookout for any decisive moves that could signal the next direction, whether it is a continuation of the uptrend or a return to lower demand levels.

Featured image from Dall-E, chart from TradingView