• Solana price drops 16.78% from $264.36 amid descending channel.
• SOL trades below 20, 50, 100, and 200 EMA, reinforcing bearish sentiment.
• Total SOL liquidations hit $15.37M, with $14.47M in long positions.

Solana (SOL) continues to face intense bearish pressure, shedding 16.78% from its local high of $264.36, with its prices currently hovering near the critical support level of $225. The cryptocurrency has been locked in a descending channel, marked by a persistent downtrend, as highlighted by the chart’s trendline below.

This trendline has stopped price action from going up and kept SOL under selling pressure. The current struggle suggests a battle between buyers and sellers, with $225 emerging as the immediate demand zone.

Historically, this level has served as strong support, but if breached, SOL could spiral further down to $215.77, the 23.6% Fibonacci retracement level.

SOL Key Technical Levels and Indicators

The Fibonacci retracement tool reveals critical levels dictating the coin’s price action. For instance, the 38.2% retracement level at $225.05 aligns closely with the current support zone, making it a decisive area to hold. On the upside, the 50% retracement tier at $232.56 aligns with key resistances, including the EMAs for 20, 50, 100, and 200 periods.

Currently, SOL trades below all these EMAs, reinforcing the bearish outlook. Moreover, the Relative Strength Index sits at 36.06, signaling that SOL is nearing oversold conditions. While this suggests that the bearish momentum may be overextended, it also leaves room for further downside if selling pressure persists.

However, the 200 EMA at $219 is another crucial support level to monitor in case the $225 level fails. A breach below this area could further trigger a swift drop to $215.77 and lower, with the descending trendline continuing to suppress upward moves.

Buyers might use this as an opportunity to recover. They could try to break above $232 and go to the $235 resistance zone. A Fair Value Gap exists above the current price, near $235, which could help price recovery if bulls get back momentum.

SOL Derivatives Market Reflects Fading Bullish Momentum

According to CoinGlass data, Solana’s Open Interest (OI)-Weighted Funding Rate sharply rose in late November, peaking at 0.06%, reflecting strong bullish sentiment as traders anticipated further upside.

Nevertheless, as SOL’s price tumbled from its high of $264, funding rates plummeted toward neutral, signaling fading optimism among leveraged traders. In addition, the SOL cryptocurrency witnessed a total liquidation of $15.37 million, highlighting the amplified volatility.

Of these, $14.47 million came from long liquidations, implying losses for overleveraged bullish traders who failed to anticipate the downtrend. In comparison, short liquidations totaled $908,030, demonstrating the current dominance of bearish momentum in the market.