Solana’s Shift: ETF News Sparks Rebound but Bears Lurk

Solana (SOL) saw a quick 5% rally to $160 this week, sparked by the announcement of its first exchange-traded fund (ETF) becoming available for trading. However, this fleeting momentum was snuffed out within 24 hours, exposing ongoing technical vulnerabilities both on lower and higher time frames.

Technical Challenges Ahead for SOL

The recent trading activity placed SOL near a critical supply cluster between $144.5 and $147.7. Analysts are closely watching this range, as a move below $144 could signal a further drop—or even plunge towards $124 or the $95 to $100 zones—where immediate support becomes increasingly scarce.

For over a month, SOL has struggled to maintain positions above crucial moving averages, specifically the 50-day and 200-day exponential moving averages (EMAs). Despite a bullish break above $148 last week, the altcoin failed to sustain upward momentum. Currently, the $148 level faces pressure, and a slide below $137 would indicate the formation of a lower low, significantly dampening any prospects for short-term bullish continuation.

On the flip side, for SOL to regain some bullish strength, it needs a successful retest of the $145 to $137 demand zone. A recovery past $160 would crucially shift sentiment and pave the way for potential growth.

Persistent Bearish Trends and Market Correlations

From a higher time frame perspective, the broader trend remains decidedly bearish. SOL has experienced a downtrend since failing to breach resistance around the $180 mark back in May. Furthermore, the asset’s performance has been undercut by Bitcoin’s (BTC) fluctuations, which, while hovering near all-time highs, has left SOL nearly 50% down since January.

If the bearish momentum continues, a retest of the daily order block between $120 and $95 seems plausible, potentially offering a more attractive long-term entry point for savvy investors. Conversely, a decisive daily close above $160 in the coming weeks could flip market sentiment, enhancing the possibility of a bullish reversal.

Currently priced around $148, SOL’s UTXO realized price distribution (URPD) indicates crucial support and resistance zones based on where tokens were historically acquired. With a density of 14.3% of supply within the $144.5 to $147.7 range, this level is vital for current price stability, provided buying pressure persists.

Data from Glassnode emphasizes the importance of maintaining above $144. A breach could lead to a drop towards lower support areas, where liquidity is thinner. Notably, the $100 to $97 range encompasses only 3% of the total supply, while $124 supports just 1.58%, pointing to limited buffers in case of a downturn. Resistance could emerge at $157, where 5.55% of supply is concentrated, presenting a challenge for upward movement.

As traders and investors navigate this volatile landscape, all eyes remain on Solana’s next moves and how closely they align with broader market trends, particularly Bitcoin’s trajectory.