Solana Sell-Off Hits 2-Month High – How Will SOL Price React?

Solana (SOL) has recently experienced a significant decline, dropping from $176 to $141 in just eight days. After this substantial drop, many traders hope for a recovery.

However, the path for this altcoin to regain its lost position is currently challenging, mainly due to changes in investor behavior that could slow down or prevent further price increases.

Solana Investors Are Selling

Long-term holders (LTHs) have shifted from being steady buyers to becoming sellers. Outflows from LTH wallets have recently spiked to a two-month high, a movement unseen in the past month.

This behavioral change signals a significant market shift, as LTHs are typically considered the backbone of an asset's price stability.

Continuous selling from these investors raises doubts about Solana's short-term price stability. Since LTHs are usually considered more patient investors, their decision to sell signals potential loss of confidence.

Macro momentum for Solana remains concerning as key technical indicators continue to signal bearish market conditions.

The 50-day and 200-day exponential moving averages (EMAs), closely monitored by traders, are showing signs of continued price decline. The Death Cross, which began in March, is still ongoing.

Although the 50-day EMA nearly crossed the 200-day EMA at the end of May, it was unsuccessful, suggesting a recovery may not be imminent. This continuous downward trend puts Solana's recovery in a precarious position.

If the Death Cross continues and the EMAs continue to diverge negatively, this could signal further price decline.

SOL Price Needs a Boost

Solana's price recently dropped 18% in just eight days but has seen a slight recovery, increasing 5% in the past 24 hours. Currently trading at $152, SOL faces a significant resistance level at $154.

This barrier is crucial for any short-term price increase. If the price cannot break through this resistance level, there could be further price decline.

Given the current market sentiment and technical indicators, Solana's price may struggle to overcome the $154 resistance. Instead, it might return to $144. If this support level does not hold, the price could drop further to $136.

However, if broader market conditions improve, Solana could experience a price surge. A breakout above the $154 resistance would push the price to $161. Achieving this would end the Death Cross, help restore investor confidence, and neutralize the bearish outlook.