Over recent weeks, Solana’s price has gradually increased, climbing from a June low of $127 to currently surpassing $200. This upward trend has been driven by the rise of new projects on the blockchain, such as USELESS, pushing SOL toward the significant $200 level. However, there are concerns about the sustainability of this rally and the possibility of a bearish scenario reversing the gains.
Solana’s Price Vulnerable to Bearish Trends
Despite the current optimism, a cryptocurrency analyst has warned of increasing bearish pressure on Solana. According to the analyst, the recent rally pushing the asset over $190 was actually a classic false breakout.
This rally managed to lift Solana’s price above the $170 resistance, paving the way for it to reach $200 and allowing a liquidity sweep at these elevated levels. However, a significant obstacle now threatens to send the altcoin downward.
The analyst notes that Solana’s price remains within an ascending channel despite the recent rally, indicating that the breakout was not successful. This failure suggests insufficient support to maintain the price, making it susceptible to bearish forces.
The analyst outlined two potential bearish outcomes. The first involves a direct decline to the maximum pain level (MPL) around $162.30, marking a key downside target. However, given the price’s current surge past $190, this scenario seems less probable.
The more likely scenario involves a move to retest previous highs before a potential drop. Alternatively, it might form a lower high before descending sharply. In either case, both scenarios point towards a reduction in price towards the MPL level.
Record Levels of Open Interest in SOL
The recent price surge has sparked a significant increase in interest in Solana, with the open interest for the altcoin reaching new record highs. Open interest, which represents the total number of open short and long positions for an asset, has now exceeded $10.96 billion, surpassing its previous peak of $8.79 billion, according to Coinglass data.
Interestingly, Solana’s current price remains substantially lower than it was during previous peaks in open interest. This suggests there might still be momentum left before the SOL price begins to decline again.
